City News

Supplied by

No piece of cake: Premier Foods CEO scrapes through re-election

7:16 pm, 18th July 2018

In the initial tally of proxy votes at the food giant’s annual general meeting, Gavin Darby appeared to withstand pressure from activist investors, scraping by with just 59% of shareholder votes.

The chief executive’s closely-run re-election came after investor Oasis Management urged investors to withdraw support for Mr Darby at Premier’s annual general meeting.

Oasis, which recently upped its stake in Premier from 8.84% to 17.3%, claimed that Mr Darby, at the helm of the company since 2013, had presided over five years of value destruction.

The shareholder held a number of grievances against Mr Darby and the Premier Foods board, including the fending off of a £537m takeover approach from US spice-making firm McCormick in 2016, and more recently the refusal to sell off the high-value Batchelors soup brand.

Instead of a merger with McCormick, Premier announced a collaboration with Japanese noodle maker Nissin, which became the food group’s largest shareholder with a 23% stake and took a non-executive position on Premier’s board.

McCormick’s bid was worth 65p per share, at a premium of Premier’s current price of 44.5p.

Oasis said: “A majority of Premier Foods’ top independent public equity shareholders have voted against the re-election of Gavin Darby.

“He has been saved by what we consider to be his cosy relationship with conflicted shareholder Nissin Foods, reminiscent of what happened in 2016 with the McCormick takeover approach.

“The message from today’s huge negative vote could not be clearer – Gavin Darby has no credibility and he should step down immediately.

“If he is unwilling to resign, we urge the other directors to discharge their duties and act in the best interests of the shareholders as a whole to remove him.”

Oasis added that, as a long-term shareholder in Premier Foods, it was “carefully considering its next steps.”

Mr Darby’s re-election was backed by shareholders that included former Tesco chairman Lord MacLaurin and Lord Price, ex-managing director of Waitrose.

Premier Foods was further bruised after more than 25% of shareholders rejected the company’s remuneration report, and the same percentage voted against chairman Keith Hamill’s re-election.

Other non-executive directors, including Shinji Honda, who represents Premier’s largest investor Nissin, also suffered a 25% vote against reappointment.

Only chief financial officer Alastair Murray was left relatively unscathed, with the backing of more than 98% of votes.

Premier Foods reported a 1.7% rise in first-quarter sales and growth of 4.5% over the half-year, as proof that Premier was “on track”.

UK sales of Mr Kipling cakes saw a 14% surge in the quarter which Premier attributed to a recent advertising push, brand redesign and new packaging.

Branded products saw sales rise 1.1% in the quarter, but non-branded sales jumped 4.8%.

The group insisted it was continuing to “identify other strategic opportunities to accelerate the company’s turnaround to create value for shareholders”.

Premier Foods owns brands which include Bisto gravy, Oxo stock cubes, as well as Birds, Angel Delight and Ambrosia desserts.