July 10, 2018 / 10:31 AM / 9 months ago

Premier Foods investors square up in CEO re-election battle

(Reuters) - Premier Foods’ (PFD.L) top shareholder is backing the British company’s under-fire CEO, even as second-largest investor and vocal critic Oasis Management nearly doubled its stake to vote against Gavin Darby.

The British company and Darby have come under pressure since rejecting a 65 pence takeover bid from U.S. spice maker McCormick & Company (MKC.N) two years ago, with the shares having since fallen more than 23 percent to 43 pence.

However, Nissin Foods Holdings (2897.T), Premier’s largest shareholder with a 19.75 percent stake, intends to vote in favor of Darby at the food company’s annual meeting next week, Premier’s spokesman said.

Nissin did not respond immediately to a request for comment.

Premier’s statement came after second-largest shareholder Oasis had raised its holding to 17.3 percent from 9.09 percent and said it was confident that Darby would not be CEO after the meeting on July 18.

The Hong Kong-based activist said it will vote all of its shares against Darby’s re-election.

U.S. hedge fund Paulson & Co, which has a 6 percent stake in Premier, on Monday joined calls for Darby to step down, saying that the company is in desperate need of new management.

However, influential shareholder advisory firms ISS, Glass Lewis and Pensions & Investment Research Consultants have all advised shareholders to re-elect Darby.

Premier, which makes Oxo stock cubes and Mr Kipling cakes, has repeatedly said that it backs Darby.

By 1010 GMT on Monday, shares in Premier Foods were up 4.5 percent on the day at nearly 44 pence.

Oasis has more work to do if it is to gain further shareholder support, said Investec analyst Nicola Mallard, adding that the combined 23 percent stake held by Oasis and Paulson is not enough to oust Darby.

Last week Oasis also called for Premier to sell its well-known Batchelors soup brand to improve its financial outlook and create funds for investment.

Premier rejected the call, saying it would not sell one of its “jewels”. Premier has a partnership with Nissin for its Batchelors noodles products, sales of which are growing by 11 percent a year.

Reporting by Sangameswaran S in Bengaluru; Editing by Patrick Graham and David Goodman

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