Who’s to blame for Aryzta’s most loyal investors getting burned?

Unspoken suggestion that part of blame falls on shareholders themselves doesn’t stand up

Spare a thought for some of the staunchest supporters of Irish-Swiss baked goods group Aryzta. They have been invested in the group from the outset – in fact, they were among shareholders in IAWS who voted to merge that listed company with Swiss peer Hiestand to form Aryzta back in 2008.

They stuck steadfastly with the company ever since. They didn’t cash in when they could have made a 70 per cent return on their investment in 2014 as Aryzta hit its peak. And they held their nerve as it lost about 90 per cent of their original investment amid a series of catastrophic missteps and profit warnings since then.

Now, without any conscious choice on their part, several hundred of them have been effectively disenfranchised in a key €790 million rights issue that the company hopes will allow it to restore its fortunes.

It won’t do much for the fortunes of these shareholders. Locked out of the process, they will now lose a further 90 per cent of their already decimated investment in the business.

And whose fault is it? There’s the catch. No one’s, it appears.

The company says it was upfront in notifying all shareholders, and those trustees or intermediaries representing them.

The trustee, a company called Link that acquired the business from outsourced services group Capita, says it didn't get the information from the company in time to allow shareholders to vote.

The unspoken suggestion is that a large part of the blame falls on the shareholders themselves. They had exercised a choice back in 2008 to receive all correspondence by post rather than electronically. That clearly means it takes longer to get correspondence to them and instructions back from them.

Aryzta and Link both knew that and both knew the timetable was tight. It appears neither was sufficiently concerned to make efforts to ensure these loyal shareholders had a chance to retain their stake in the business.

Shareholders in public companies are always assured their voice is equal. It appears in this case that some are more equal than others.