Monday 26 September 2016

Under-fire Killian vows he will not offload any more shares at Aryzta

CEO Owen Killian seeks to reassure investors after selling more than 400,000 shares, writes Gavin McLoughlin

Published 20/03/2016 | 02:30

Aryzta boss Owen Killian
Aryzta boss Owen Killian

Aryzta boss Owen Killian has sought to draw a line under a turbulent week by reassuring investors that he will not be selling any more shares in the Swiss-Irish listed baked-goods company.

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The notoriously private CEO announced that he had sold two-thirds of his stake in Aryzta last Monday and Tuesday - hours before the former food darling unveiled a flat set of half-year results.

The surprise announcement that Killian had sold some €16m worth of his shares sent Aryzta's share price tumbling to a five-year low on Wednesday of €33.24, before closing at €33.80 on Friday.

The decline cemented a 50pc fall in Aryzta's share price in the last year.

In a brief statement, Killian said the offloading of 427,250 shares had been triggered by "the weakness in the share price impacting the collateral value of the share" and insisted that the disposal was "not indicative" of his confidence in or commitment to Aryzta.

It is common for chief executives to pledge their company shares as security on personal borrowings. However, the Roscommon native, who is said to be embarrassed by the publicity surrounding the share sale, has assured investors and colleagues that the underlying loan which triggered the sale has been fully discharged.

The share sale has led to speculation surrounding Killian's potential personal exposures outside of the global food group, whose success has mirrored his own. The law surrounding disclosure of share pledges by directors is, at present, uncertain.

However, from July of this year, all directors of listed companies must disclose to the market if they have pledged their shares as security for personal borrowings under the EU's new Market Abuse Regulations.

Aryzta officials met shareholders in London on Wednesday and held a similar round of talks with investors in New York on Thursday following publication of its half-year results.

Killian, who has been chief executive of Aryzta since 2007, following the merger of the Irish Agricultural Wholesale Society (IAWS) and Hiestand - the Swiss gourmet bakery - has been under pressure to defend its acquisition strategy and lacklustre performance in key US markets.

Aryzta's recent Picard deal, in particular, was badly received by investors.

In a major departure from the company's traditional par-baking strategy, Aryzta acquired a 49pc stake in the French frozen-food retailer Picard.

The €446m acquisition was funded through the disposal of Aryzta's stake in agricultural services group Origin Enterprises, chaired by Rose Hynes.

Aryzta did not respond to queries.

Vontobel analyst Jean-Philippe Bertschy said in a note to investors that the signal sent by Killian's share sale could not be more negative for the company.

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