Aryzta chair to provide shareholders with a clearer picture of company’s future
Shares in Swiss-Irish group have fluctuated wildly in recent weeks
ARYZTA chair and interim CEO Urs Jordi is expected to provide commentary on the future of the company tomorrow when it releases its first-quarter trading update.
Any potential comments from Mr Jordi should provide shareholders with a clearer picture of the options facing the Swiss-Irish group ahead of its AGM on December 15.
Tomorrow is the first time analysts get to probe Mr Jordi since the departure of Aryzta chief executive Kevin Toland.
The results themselves will cover Aryzta’s top line only. Possible comments from Mr Jordi about the strategic direction of the company will be of more interest for shareholders and the share price development.
The trained baker and confectioner has previously said now is “the worst time” to sell the business.
“Mr Jordi is looking for support at the upcoming AGM on December 15 and, in order to get a strong mandate, we think he has to outline [his] rough plans before. The quarter-one update would be a great opportunity in our view,” Andreas von Arx, analyst at Swiss broker Baader, said.
Shares in the company fluctuated wildly over the past two weeks following reports US hedge fund Elliott was considering a bid for the company. Elliott has since confirmed it has made a non-binding offer of CHF0.80 per share in a deal that would value the company at around €734m.
Aryzta is profitable, reporting revenue and underlying earnings before interest, taxation, depreciation, and amortisation (Ebitda) of €2.9bn and €260m respectively in the 12 months to August 1.
However, it has been under pressure with its debt levels for a number of years.
In addition, Aryzta, which is best known for its Cuisine de France brand in Ireland, has been badly affected by the Covid-19 pandemic.
In April, sales were down 49pc year on year. Sales have continued to decline year on year since then, albeit at a slower rate, and in July were 18pc lower compared to 2019.
With second lockdowns across Europe, analysts expect Aryzta to announce slightly weaker figures for the August to October quarter.
Elliott could make a binding offer for the company comfortably ahead of the AGM, people
close to the situation have previously said. This is something sources close to Aryzta have rejected, as it would require a separate extraordinary general meeting and time to consider any offer.
Aryzta’s biggest shareholder last week called for a rejection of a bid for the troubled baking giant from Elliott, saying that the offer “significantly undervalues the company”.
On Friday, a second Aryzta shareholder – Lodbrok Capital – also called on the board to reject the Elliott bid. Lodbrok holds around 4pc of the share capital and about 29pc of the total outstanding hybrid debt in Aryzta.
Commenting on the future of Aryzta, analyst Mr von Arx said: “As outlined in the past, we see significant upside in case of a successful transformation and refocusing of the business model.
“However, to quantify that view, one needs some clear insights into the strategic medium-term direction, ie, what parts of the business might be reviewed.”