Premier Foods PLC: issues shareholder circular

London / UK. (pf) British 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 percent of the Company’s shares (each or together, as the context requires, «Oasis»).


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 GBP 1 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 percent 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».

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