Has Aryzta’s new chairman got the appetite for the job ahead?

Shareholders’ choice of Urs Jordi leaves the food giant’s sale to Elliott up in the air

Aryzta’s Irish directors are now all gone, including  chairman Gary McGann. Photograph: Alan Betson

Aryzta’s Irish directors are now all gone, including chairman Gary McGann. Photograph: Alan Betson

 

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.”

‘Strategic review’

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?

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.