Sunday 25 March 2018

Egyptian tycoon takes stake in troubled C&C

Bulmers maker has given Pabst the right to buy its much-criticised US assets, writes Sarah McCabe

Stephen Glancey, chief executive of C&C
Stephen Glancey, chief executive of C&C
Sarah McCabe

Sarah McCabe

Another activist investor has accrued a large stake in Bulmers maker C&C.

Nassif Sawiris, the youngest son of one of Egypt's richest families, and US investment group Southeastern Asset Management have together amassed €22.4m shares in C&C, a 6.7pc stake.

The stake has been built up in the last few months, most of it via a new fund called Southeastern Concentrated Value, a long-term venture between the two. The fund plans to invest in a select few European companies it deems to be under-performing, to spur boardroom revamps and influence strategy.

The partners are now C&C's fourth biggest shareholder, after Franklin Templeton, Fidelity Investments and Wellington Management.

A spokesperson for Southeastern would not comment on its intentions for C&C. The person said: "Southeastern and Sawiris always aim for constructive dialogue with the management of the companies they are invested in."

Under-pressure C&C has only just publicly faced down another activist investor, Orange Capital, which built up a 5pc stake in the drinks maker before calling on C&C to sell its much-criticised US assets in October.

The company entered the US in 2012 with the purchase of Vermont Hard Cider Company for €235m. Since then it has grappled with distribution problems and competition from rival US brewers, culminating in May with a €150m write-down.

Chief executive Stephen Glancey said he was committed to the US business as recently as last month.

However Glancey changed tack this week, announcing on Friday that C&C had inked a distribution deal with Pabst which gives the US multinational a long-term option to buy Vermont Hard Cider Company.

C&C is only the second investment by the Sawiris/Southeastern fund. It also bought a stake in Swiss chemicals maker Sika over the summer.

At Sika it has joined other high-profile minority investors like the Bill and Melinda Gates Foundation in challenging a takeover attempt.

In the wake of the financial crisis, lots of fund firms are demanding a greater say in how companies are run after clients accused them of charging high fees but failing to hold board members to account for weak strategy, poor profits or excessive pay.

Sawiris, ranked by Forbes as the 240th richest person on earth, and Tennessee-based Southeastern, the investment firm set up by Mason Hawkins 40 years ago, have already cooperated as independent shareholders to significant effect at several large firms.

Both are investors in cement firm LafargeHolcim, for example. During the protracted merger of Holcim and Lafarge, Sawiris, with the support of Southeastern, was instrumental in pushing for Lafarge management to retain positions of influence in the combined merger.

Both have also separately invested in Adidas, at a critical juncture for the Bavaria-based company. Adidas is seeking a new boss who can help restore its fortunes in the US market.

Sunday Indo Business

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