Arysta: shareholders demand change of board of directors
Thursday, 21.05.2020
news-single-imgcaption" style="width:240px">Activist shareholders Veraison and Cobas Management are calling for a complete transformation of the board of directors. (Keystone)
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Activist shareholders Veraison and Cobas Management are calling for a complete transformation of the board of directors of the industrial baker in difficulty Aryzta. To this end, this group of shareholders, which holds a 17.8% stake, calls for the convening of an extraordinary general meeting.
In a press release issued Thursday by Veraison, the holding company and the Spanish Cobas Management say they would like to see the board of directors strengthened, in order to restore shareholders’ confidence.
In recent years, shareholders have had to endure significant destruction of value. Four of the 11 directors have been in place since 2016 or before and are jointly responsible for the company’s unresolved problems.
In order to regain trust, the board of directors must be completely changed. The four directors Gary McGann (president), Dan Flinter, Annette Flynn and Rolf Watter, in place since at least 2016, must be replaced by experts from the sector. Kevin Toland must also leave the supervisory body to focus on his role as CEO, claim activist shareholders.
Industry specialists
The board of directors must include personalities with experience in industrial baking. The group of shareholders therefore proposes the election of Urs Jordi, Armin Bieri and Heiner Kamps. Once elected, Mr. Jordi should assume the presidency of the supervisory body.
Mr. Jordi is the former director of Aryzta Europe and, before the merger with Aryzta in 2008, he was managing director (CEO) of Hiestand Holding. Mr. Bieri was notably CEO of Hiestand / Aryzta Schweiz and CEO of Aryzta Food Solutions Asia Pacific.
Mr. Kamps is also a known figure in the food industry. He set up the German chain of bakeries Kamps and was notably a member of the fast food chain Nordsee and CEO and chairman of the supervisory board of the Müller Milch group.
It is not yet known when the extraordinary general meeting could take place. In a brief statement released Thursday, Aryzta said it would consider the shareholders’ group’s proposals.
The pressure increases
In recent weeks, Veraison and Cobas have increased the pressure on Aryzta and said they wanted to actively contribute to improvements for the company. They believe that the Aryzta shares are currently showing a significant discount compared to the value of the company and want to restore confidence.
Since the beginning of the year, the Aryzta share has lost almost two thirds of its value on the stock market. On Wednesday, it again lost 5.8% to 0.38 francs. A year ago, she was still worth 1.40 francs.
The group of shareholders demanded a significant reduction in the complexity of the group last week. According to him, the food industry has sustainable potential for creating value, even in this period of health crisis.
Aryzta was in trouble before the coronavirus crisis, which only exacerbated the situation. In 2018, the group had to carry out a capital increase. He is currently negotiating with his creditors to obtain a relaxation of the conditions in order to increase his financial flexibility.
Aryzta also announced cost reduction measures to guarantee its liquidity. Eight factories have been temporarily closed, including three in Europe and five in North America. Almost 30% of staff have been put on leave.
Last week, Aryzta said it was considering all the strategic and financial options. To this end, the adviser Rothschild & Co was engaged and responsible for presenting a report by the end of July. With pressure from shareholders, things could accelerate. (awp)
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