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Aryzta sells North American pizza business, board considering Elliott offer

Baked good firm given just days to respond to bid from US hedge fund

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Aryzta is best known in Ireland for its Cuisine de France brand. Photo: Leon Farrell/Photocall Ireland

Aryzta is best known in Ireland for its Cuisine de France brand. Photo: Leon Farrell/Photocall Ireland

Aryzta is best known in Ireland for its Cuisine de France brand. Photo: Leon Farrell/Photocall Ireland

The board of Aryzta says it is considering a binding offer for the company made by US hedge fund Elliott over the weekend.

On Saturday, Elliott made an offer of CHF0.80 (€0.74) per share, valuing the company at €734m. Elliott has given Aryzta just days to consider the offer, the Irish Independent understands.

In a statement today, the Swiss-Irish food group said the board “will carefully consider the offer in accordance with its fiduciary duties and processes in due time”.

One shareholder, Lodbrok Capital, which has previously voiced opposition to the Elliott bid, said it would be "highly inappropriate and grossly inconsistent" for Aryzta's board to back the latest offer ahead of next week's annual general meeting (AGM) because four of the directors are due to stand down anyway.

Andreas von Arx, analyst at Swiss broker Baader, said that given the conditions of the offer with regards to a short deadline, a deal is “very unlikely to go through”.

“We find it difficult to assess if the current binding offer – on which Elliott must have been fully aware on the limited resonance it likely would get from Aryzta – is a final push, and then Elliott might give up. Or just a next step, which then would lead to a, in our view, more serious offer. We suspect the coming days will show,” Mr von Arx said.

Aryzta also announced the disposal of its North American take and bake pizza business to Private Equity group Brynwood Partners. Terms and conditions of the deal are not being disclosed.

The business has sales of approximately €200m, according to analysts, with the division worth around 25pc of the North American business, and 7pc of the group.

“In our view the business unit did not have a meaningful Ebitda contribution to group [lately] and therefore [cash] proceeds are low,” said Mr von Arx.

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Earning a crust: Aryzta sold off its ready-made pizza arm

Earning a crust: Aryzta sold off its ready-made pizza arm

Earning a crust: Aryzta sold off its ready-made pizza arm

As part of its restructuring plans, Aryzta has announced that two members of its executive committee, Tony Murphy, chief people officer, and John Heffernan, president and chief commercial officer of Aryzta North America, have ceased their roles with immediate effect.

The two will not be replaced.

“The board would like to express its gratitude to both Tony and John for their contribution to Aryzta over the past three years,” the company added.

Aryzta, whose customers include McDonald’s, has been battered by a boardroom battle this year that saw activist shareholders successfully install their own nominee, Urs Jordi, as chairman.

The bust-up saw veteran Irish businessman Gary McGann step down as chairman, while former Glanbia executive and ex-DAA boss Kevin Toland suddenly resigned as CEO last month.

Mr Jordi – who’s also interim CEO – has previously insisted he doesn’t want to sell Aryzta, with Elliott Management having circled the beleaguered company for weeks. It had previously tabled a non-binding offer for the company.

Since 2014 the company, which traces its roots back to IAWS, has lost over 90pc of its share value, leaving thousands of Irish farmers, co-op shareholders and investors with collective losses running well into the millions of euro.

Following an extraordinary general meeting of the company in September, there is no longer an Irish presence on the board of directors.

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Shares in Aryzta were up 4pc in late-morning trading in Dublin today.

The company is due to hold its AGM next week.

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