Premier Foods mulls selling assets as investors plan to replace CEO

UK – The British food manufacturer, Premier Foods has said it may sell part of its assets to turnaround its business even as shareholders mount pressure on the CEO, Gavin Darby to step down.

Plans to sell part of its business received back up from the CEO who said he was open to do the transaction at the right price.

According to the chairman of the board Keith Hamill, the firm was holding talks to sell its Batchelors soup brand to Japan’s Nissin Foods, although no definite transaction has been reached yet.

Nissin agreed to acquire 17.27% shareholding in Premier Foods in 2016 and since they have formed a strategic partnership to sell Batchelors Super Noodles.

Oasis, another shareholder in the maker of Bisto gravy nearly doubled its stake to 17.3%, taking it close to Nissin’s 19.75%.

In its last week’s trading update, the company said that the Batchelors brand continued to display excellent growth, helping Premier’s quarterly sales rise 1.7%.

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Sales were also boosted by Premier’s largest brand, Mr Kipling cakes after a brand relaunch in March 2018 that included a television advertising campaign, brand redesign and new packaging.

In its quarter results, the firm posted a 1.7% increase in sales driven by strong demand for Mr Kipling cakes.

Premier Foods also holds a cake production and marketing partnership with Mondelez, and in August 2017 the two announced they had expanded the deal to produce and market Cadbury-branded cake and ambient dessert products.

CEO ouster plan

Premier Foods has been under pressure to retain its CEO, Gavin Darby as two shareholders planned to replace him at the annual general meeting.

One of its largest shareholders, Paulson & Co has been criticizing the board for rejecting a takeover bid with the US food maker McCormick in 2016.

Consequently, Premier’s second-largest shareholder, Oasis Management has called for shareholders to vote against Darby’s re-election during the annual general meeting, but reports have it he survived the vote.

In its outlook, the company said it expects to make progress in the second half of the year and reduce debt by US$29.03m each year.

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