Premier Foods plc Premier Foods plc issues shareholder circular (2018T)
July 02 2018 - 2:00AM
UK Regulatory
TIDMPFD TIDMIRSH
RNS Number : 2018T
Premier Foods plc
02 July 2018
2 July 2018
Premier Foods plc (the "Company")
Premier Foods plc issues shareholder circular
Premier Foods plc announces that it has today issued a circular
to shareholders pursuant to Section 314 of the Companies Act 2006
that contains, amongst other matters, a statement by Oasis
Management Company Ltd and Oasis Management (Hong Kong) LLC on
behalf of Oasis Investments II Master Fund Ltd, which is the
beneficial owner of 9.34% of the Company's shares (each or
together, as the context requires, "Oasis").
Background
On 21 June 2018, the Board announced that it had been made aware
that Oasis intends to vote against the re-election of Gavin Darby
as Chief Executive Officer at the Company's AGM on 18 July 2018 and
was encouraging others to do the same.
Since then, Oasis has made a number of highly critical comments
about Premier Foods and Gavin Darby. On 26 June 2018, the Board
received notice that Oasis wished to exercise its right to request
the Company to circulate to all shareholders, on its behalf, a
statement in the form provided by Oasis
The Board's response
The Board rejects the various statements made and sentiments
expressed by Oasis to date. The Board has confidence in Gavin Darby
and firmly believes that he and the Management Team are best placed
to run the business and execute the Company's strategy.
Gavin Darby became the Chief Executive Officer of Premier Foods
in February 2013 at a time when the Company was in serious
financial difficulties. It had net debt of nearly GBP1 billion,
which was a ratio of 6.0x Net debt to EBITDA. On the day of his
appointment, the Financial Times stated that Gavin Darby faced "a
Herculean Task".
Since then, Gavin Darby has been successfully transforming
Premier Foods throughout a challenging industry back-drop by
undertaking significant cost and efficiency initiatives, properly
integrating the businesses which had previously been acquired,
introducing modern sales and marketing processes and establishing
positive relationships with customers. The business has progressed
and is leveraging key strategic partnerships with Nissin Foods
Holdings Co., Ltd (with noodles) and Mondelez International (with
Cadbury cakes), which has substantially increased the rate of
innovation and new product development and is driving rapid
international expansion.
The Company's most recent financial results demonstrate good
progress. In 2017-18, the Company reported its strongest rate of
total sales growth in over five years, international sales growth
of 25% and a reduction in the ratio of Net debt to EBITDA to 3.6x.
The Board now expects the ratio of Net debt to EBITDA to be below
3.0x by March 2020, ahead of the previous estimates.
The Board is committed to continuing its strategy of improving
performance and reducing net debt, while working in parallel to
identify other strategic opportunities to accelerate the Company's
turnaround to create value for shareholders.
Should the Oasis proposal be successful, there is no certainty
that a manager with equivalent or superior skills could be
recruited, at acceptable cost or within a reasonable period.
Keith Hamill, Premier Foods' Chairman, said: "The Board believes
that Gavin Darby is running the Company well. In contrast, the
Oasis proposal offers no constructive solution to the challenges
being addressed and involves the risk of creating instability at a
time when continuity is important in completing the work being
done. The Board unanimously recommends that shareholders vote in
favour of Gavin Darby's re-election as CEO at the AGM on the 18th
July 2018."
Ends
For further information, please contact:
Investors and analysts:
Alastair Murray, Chief Financial Officer +44 (0) 1727 815
850
Richard Godden, Director of Investor Relations & Treasury
+44 (0) 1727 815 850
Media:
Maitland
Neil Bennett +44 (0) 20 7379 5151
Clinton Manning +44 (0) 20 7379 5151
Joanna Davidson +44 (0) 20 7379 5151
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END
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