Food giants circle embattled Aryzta

US-based Flowers Foods and Hostess Brands, Japan's Yamazaki Baking and Grupo Bimbo of Mexico have emerged as possible buyers for troubled Swiss-Irish food group Aryzta.

Contrary to speculation that a deal to buy the company had faded, market sources claimed a transaction was still very much on the cards.

Hostess Brands, the maker of popular US snack Twinkies, acquired Aryzta's Cloverhill facility in Chicago in 2018 for €21 million.

Aryzta, which owns the Cuisine de France label here, said last month it had received approaches from several unsolicited parties interested in taking over the group.

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At the time, Gary McGann said he would step down as chairman if a deal had not been secured before an Extraordinary General Meeting (egm) scheduled for next month.

The company's move earlier this month to line up Andreas Schmid, the former head of Swiss-Belgian chocolate giant Barry Callebaut, as Mr McGann's replacement prompted speculation that it may not have been able to secure a takeover deal, which led to a drop in Aryzta's share price.

However, market sources noted that the company’s position regarding an acquisition deal had not changed and that it would be obliged to update investors if there had been a change.

They also downplayed the possibility of Aryzta being sold off in parts amid speculation that private equity funds were interested in the company’s Australian business, noting that the expressions of interest were for the entire issued share capital of the company.

Showdown set for egm

Aryzta has been struggling to halt a decline in earnings, particularly in the United States, and negative investor sentiment towards its complex capital structure.

Dissident shareholders led by Swiss group Veraison and Aryzta's largest investor Cobas are attempting to oust the current board in a bid to reverse the decline. Both sides are set for a showdown at next month's egm.

Almost €400 million worth of asset sales, a major reduction in net debt and a €200 million cost-cutting programme have not been enough to prompt a turnaround in Aryzta’s fortunes and it has been hit hard by Covid-19-related lockdowns in the US.

Aryzta shares closed 3.4 per cent down at 51 cent in Dublin on Thursday.