Aryzta's egm in Zurich on Wednesday was extraordinary in many ways. The disaffected shareholders (led by Swiss investor Veraison and including Spain-based Cobas Asset Management) secured 96.6 per cent backing from voters for their candidate for chairman, Urs Jordi, to join the board.
The Irish directors are all now gone, including chairman Gary McGann, with chief executive Kevin Toland voted off the board by 62.2 per cent of shareholders, although he continues to retain his position as CEO.
The potential sale of Aryzta to a unit of US hedge fund Elliott Management was thrown into doubt, with Jordi – a former head of Hiestand International, which merged with Irish group IAWS in 2008 to create Aryzta – opposing such a deal.
“It would certainly be the worst point in time to sell the company right now,” Jordi told the meeting. “We need to streamline our organisation. We want to push forward innovation.”
In May, Aryzta hired investment bank Rothschild to carry out a "strategic review" of the business. This ultimately led to unsolicited bid approaches, including the one from Elliott, which is led by billionaire Paul Singer. The Elliott offer is said to be at an advanced stage.
McGann and Toland had overseen almost €400 million of asset sales to reduce Aryzta’s hefty net debt, and pursued a cost-cutting programme designed to deliver €200 million of savings in the three years to July 2021.
The group, which owns the Cuisine de France and Otis Spunkmeyer labels, had been struggling to halt a decline in earnings, particularly in the US, and negative investor sentiment towards its complex capital structure.
The Covid-19 pandemic, and its devastating impact on economies across Europe and the United States, just added to the company's woes.
A number of questions now arise for Arytza. Will Toland remain as chief executive? Will Elliott Advisors pull its offer for the company? Can the company survive the ongoing drag of Covid on global economies? Can the new regime come up with a plan to turn around the business and return value to shareholders? Or has Jordi bitten off more than he can chew?