Premier Foods CEO set to survive investor vote (updated)
18/07/2018 13:19
* Shares down 5 pct
* Company open to selling parts of business
* Q1 sales up 1.7 pct
(Adds details from AGM, updates shares)
By Martinne Geller and Sangameswaran S
LONDON, July 18 (Reuters) - The embattled chief executive of
Premier Foods PFD.L looked set to survive a vote to oust him
by a narrow margin on Wednesday after the company said it was
open to selling parts of the business to speed up a turnaround
demanded by shareholders.
The maker of Mr Kipling cakes and Bisto gravy has been under
shareholder pressure ever since U.S. food maker McCormick
MKC.N walked away from a takeover bid in 2016.
That has led some of its largest investors to accuse the
board and CEO Gavin Darby of mishandling the offer.
Premier's second-largest shareholder, Oasis Management, had
called for shareholders to vote against Darby's re-election on
Wednesday.
The Hong Kong-based investor has accused Darby of having no
credible strategy to tackle slowing UK growth and reduce its net
debt, which stands at around 495 million pounds ($645 million).
Darby has received the support of 58.92 percent of proxy
votes counted ahead of the company's annual general meeting on
Wednesday, with 41.07 percent of shareholders voting against his
re-election.
At the AGM, Darby said he would not resign if he survived
the vote to replace him, responding to a question from an Oasis
representative.
Darby, who has been in charge of the Oxo stock cube-maker
for more than five years, said he was open to selling assets at
the right price.
"Nothing is off the table," Chairman Keith Hamill said on
Tuesday. urn:newsml:reuters.com:*:nL8N1UD6FO
Hamill said the company had held exploratory talks to sell
its Batchelors soup brand to Japan's Nissin Foods 2897.T
although nothing materialised.
It has a partnership with Nissin - its largest shareholder -
to sell Batchelors products.
Premier shares were down 5.4 percent to 44.30 pence by 1158
GMT. Although the shares have fallen 28.2 percent since Darby
took over, they have recovered over the course of the proxy
fight as investors anticipated asset sales or other strategic
moves.
Oasis nearly doubled its stake in Premier to 17.3 percent in
the week before the annual meeting, taking it close to Nissin's
19.75 percent.
The company said in a trading update on Wednesday that the
Batchelors brand continued to "display excellent growth",
helping Premier's quarterly sales rise 1.7 percent.
The company's largest brand, Mr Kipling, boosted sales
following a brand relaunch in March that included a TV
advertising campaign, brand re-design and new packaging.
Premier has seen sales outside its home market grow, thanks
to its partnerships with Nissin and candy-maker Mondelez
MDLZ.O .
Sales at its international business rose 4 percent in the
quarter and nearly 20 percent over the last two quarters, the
company said.
($1 = 0.7673 pounds)
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Premier Foods share price since Darby took over https://tmsnrt.rs/2L4cozf
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(Reporting by Martinne Geller; editing by Leslie Adler and
Louise Heavens)
((martinne.geller@thomsonreuters.com; +44 (0) 2075420797;
Reuters Messaging: martinne.geller.reuters.com@reuters.net))