July 18, 2018 / 6:03 AM / a month ago

Premier Foods says it is open to asset sales

LONDON, July 18 (Reuters) - Britain’s Premier Foods Plc 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.

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 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 and Vodafone.

“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)

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