Glanbia activist’s break-up calls fail to excite investors – so far

Two weeks after disclosing it had built up a small stake in Glanbia, German activist investor Clearway Capital thought it was time, on the eve of the company’s annual general meeting on Thursday, to share some thoughts.

The firm, founded in 2020 by Gianluca Ferrari, who previously led campaigns against companies such as Spanish renewable energy group EDP Renovaveis, Greencore and UK aviation services company John Menzies, on Wednesday published a letter he had previously sent to Glanbia's chairman, calling on Glanbia to spin off its global performance nutrition (GPN) business into a standalone company with a dual listing in the United States and Ireland.

Ferrari called on Glanbia to change the messaging around the GPN's SlimFast brand, for which Glanbia paid $350 million (€301 million) in 2018, from being "dieting" and towards a "healthy lifestyle" – or risk "permanent impairment" to the label.

Ferrari, whose firm is believed to own about 1 per cent of Glanbia, said the stock should be trading at more than €21 double the level at which the shares were changing hands before he disclosed his stake last month.

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“The current corporate structure is undermining the quality of Glanbia’s businesses, causing frustration among shareholders,” he said. “Every day that the company continues to trade at an embarrassingly low valuation is another day that shareholders are deprived of value that is rightfully theirs.”

Asked on an analysts’ call on Thursday about her view of the pesky activist, Glanbia’s managing director Siobhán Talbot said the group’s central management was its strength. She said the group was staying ahead of inflation and supply issues better than peers because insights in the Glanbia Nutritionals unit, home to the group’s US cheddar cheese business and supplier of dairy and plant-based proteins to food companies, were being passed on to GPN. She added that SlimFast was now 45 per cent bigger than when it was acquired.

It helped, too, that Glanbia was confident enough by the 17 per cent increase in pricing in its products and 6.9 per cent sales volume growth in the first quarter to raise its full-year earnings forecasts.

The share reaction to the earnings upgrade was a 3.3 per cent rise on the day, compared to the 1.4 per cent decline seen on Wednesday as investors (including Glanbia Co-op, which continues to own about 31 per cent) digested Ferrari’s musings. But will he get others onside?