Aryzta hires Rothschild as shareholders combine to make demands
CUISINE de France owner Aryzta has hired investment bank Rothschild to advise it, in a move that suggests no option, including a sale or radical restructuring, is off the table.
In a stock market announcement, the Swiss-Irish company said the investment bank had been appointed in April for a review that will run until the end of July.
“The Board of Aryzta announces that in April it appointed Rothschild & Co to undertake a review of all strategic and financial options available to the Group to maximise value for the benefit of all of the Group’s stakeholders. The review is expected to be concluded by the end of July 2020,” the company said.
Aryzta, led by former DAA and Glanbia executive Kevin Toland, faced huge challenges well before the Covid 19 outbreak, but had raised equity, cut debt and sold off assets, including last year’s exit for €156m from a stake in French frozen food supplier Picard. The stake had been bought in 2015 for €446m.
But the earlier pressure on Mr Toland and Aryzta chairman Gary McGann to reshape the business has now been compounded by declining demand for its baked goods as a result of the Covid-19 lockdowns, including in the hugely important US market.
Earlier this month Aryzta announced that lenders had waived covenant test in April, a sign on the one hand of a supportive lender group but also highlighting a deteriorating financial position.
On Wednesday, Aryzta’s biggest shareholder Cobas Asset Management and a second investor Veraison further upped the ante, demanding changes to help boost the share price, and announcing a tie-up of their combined 17.3pc stakes. The board’s response, that Rothschild is already in situ as advisor, suggests action was already in train.