Big hitters come out to bat for under fire Premier Foods boss
Oasis Management claimed it has candidates chomping at the bit to head up Premier.
Premier Foods boss Gavin Darby has been given the backing of two industry heavyweights as he continues to come under heavy fire from an activist investor calling for his head.
Lord MacLaurin and Lord Price – the former chairman of Tesco and ex-managing director of Waitrose respectively – have thrown their weight behind the embattled chief executive.
“What Gavin has achieved at Premier Foods since he became CEO has been hugely impressive. He has significantly strengthened the company’s finances and transformed its brands. For Premier Foods to change chief executive at this stage would be a mistake,” Lord MacLaurin said.
The comments come after Oasis Management, which is calling for the immediate removal of Mr Darby, claimed it has candidates chomping at the bit to head up the Mr Kipling cake firm.
Adding to the chorus of support for Mr Darby is Lord Price, a former Government trade minister, who added: “Premier Foods has serious structural issues when Gavin became chief executive (in 2013). Few CEOs would have taken them on.
“Since then the company has restructured its debt, its pension deficit, sold assets and realised value and traded through a really demanding market. If these activist investors succeed in removing him they risk destroying significant value, rather than creating it.”
Oasis is Premier’s second largest investor with a stake of about 9% and claims that Mr Darby has presided over five years of value destruction, poor financial performances and exhibited a lack of strategy.
It said on Monday that it has been approached by alternative chief executive candidates who have “excellent skills and are available immediately”.
In response to statement of support for Mr Darby from Premier chairman Keith Hamill, Oasis said: “We are disappointed to see that the board refuses to acknowledge the shareholder value destruction, poor financial performance and lack of strategy at the now zombie-like Premier Foods under the shocking reign of Gavin Darby.
“Furthermore Oasis have CEO candidates who have approached us, have excellent skills and are available immediately.”
It came after Mr Hamill said Mr Darby is “running the company well”, claiming the Oasis proposal offers risks “creating instability”.
Oasis plans to vote against Mr Darby’s re-election at Premier’s forthcoming AGM on July 18, and is encouraging other shareholders to do the same.
The investor also took aim at Mr Darby’s successful defence of a takeover tilt from US firm McCormick in 2016.
At the time Mr Darby, who has been in the top job since 2013, saw some shareholders vent their anger for rejecting McCormick’s indicative offers, which valued the company at a 90% premium to its share price.
“After five years of failure and two years after a 65p takeover approach, we still do not see any share price or operational improvement. The time has come for Gavin Darby to go,” it said.
At the time, instead of tying up with McCormick, Premier announced a collaboration agreement Nissin, which also took a non-executive position on Premier’s board.
Premier Foods is also behind Ambrosia custard and Bisto gravy.