The official line is that Aryzta is still in talks to be taken over by US hedge fund Elliott Management, but the share price tells a different story.
Shares in the embattled Cuisine de France owner rose to 75 cent earlier this month on speculation that a deal could be imminent. But that was before a boardroom coup took out most of those pushing for it, and installed as chairman dissident shareholder candidate Urs Jordi, who opposes a sale.
“It would certainly be the worst point in time to sell the company right now,” Jordi said at last week’s high-stakes egm.
In the interregnum shares have slumped to 54 cent, a 28 per cent decline, suggesting investors think the prospect of deal may have been extinguished along with the previous board. Shares were down 10 per cent on Wednesday alone.
The new team is likely to use the next few weeks to settle in before providing an update. Aryzta has full-year results due out on October 6th, and it may decide to use that juncture to update on the talks process if there still is one.
The group has been hit hard by coronavirus, particularly in the US, as it supplies a host of quick-serve chains, among them McDonald's and Subway, which found themselves under lockdown at the peak of the pandemic.
Former chairman Gary McGann and chief executive Kevin Toland had presided over an €800 million capital raise, almost €400 million of asset sales and a €200 million cost-cutting programme – all designed to cut debt and refocus the group on its core baked goods operations.
However, they were not enough to halt further declines in the share price or quell shareholder disquiet over the strategic direction of the company.
Investor advisory group ISS said the former board, had been "tackling the company's challenges with too little urgency". McGann is now gone, and Toland finds himself on the precipice of yet another regrouping
