Premier Foods says it is open to asset sales
18/07/2018 07:00
By Martinne Geller
LONDON, July 18 (Reuters) - Britain's Premier Foods Plc
PFD.L is open to selling assets at the right price, its chief
executive officer said, ahead of a showdown with investors on
Wednesday where he could lose his job.
CEO Gavin Darby has been under fire by some shareholders for
what they perceive as a lagging share price for a company
weighed down by heavy debt and some low-growth brands. Activist
shareholder Oasis Management has called for investors to vote
against Darby's re-election at Wednesday's annual general
meeting. urn:newsml:reuters.com:*:nL4N1TQ04K
Darby, who has led the maker of Mr Kipling cakes since 2013,
declined to comment on the shareholder vote or the security of
his position, but he told reporters late on Tuesday that the
escalating battle with Hong Kong-based hedge fund Oasis has had
some benefits, such as publicising the fact that assets may be
up for sale.
Darby and Chairman Keith Hamill said Premier had recently
undertaken strategic reviews that included exploring the
possibility of selling assets. One review, begun in the spring,
was accelerated due to Oasis's agitation, while another was
undertaken earlier this year.
"Nothing is off the table," Hamill said.
As part of the review, he said Premier had held "exploratory
discussions" with Japan's Nissin Foods 2897.T about selling
Batchelors soups, but nothing materialized. He said the board
looked at the possibility and Oasis was "highly enthusiastic"
about it, but such a move was not acted upon.
"Going forward things may change," Darby said. "One of the
beauties of the whole process is that it's been public. If
you're a strategic buyer somewhere in the world ... you're going
to know about Premier Foods, and you're going to know that the
chairman and CEO are open to looking at alternatives. That may
generate a buyer."
Another benefit from Oasis' campaign has been greater
engagement with shareholders, said Darby, who has also worked at
Coca-Cola KO.N and Vodafone VOD.L .
"We've never had so much engagement with our shareholders,"
Darby said. "I think it is a good process to engage with
shareholders as much as we have and that's great."
An Oasis representative, Daniel Wosner, joined Premier's
board last year when the fund took a stake in the firm, but he
stepped down this year. Darby said he was not surprised.
"An activist investor on the board has some challenges," he
said. "Because they're on the board, it restricts to some degree
their room for manoeuvre and typically activists like to do
their own thing."
Darby described Wosner as "professional" and Hamill said
there had been "a reasonable period of cooperation" with him,
noting that he was "challenging, but challenging is no problem."
(Reporting by Martinne Geller
Editing by Leslie Adler)
((martinne.geller@thomsonreuters.com; +44 (0) 2075420797;
Reuters Messaging: martinne.geller.reuters.com@reuters.net))