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Aryzta concludes acquisition talks with Elliott Advisors | 2020-10-27



SCHLIEREN, SWITZERLAND — Aryzta AG announced on Oct. 24 that it has concluded its acquisition discussions with Elliott Advisors (UK) Ltd. Aryzta said the talks ended without a binding offer, and the company now will move forward in search of the “optimum option to bring the company forward sustainably.”

“As mentioned on Oct. 6, all strategic options will be fully explored in the best interest of the business and all stakeholders,” said Urs Jordi, chairman of Aryzta. “This is an important step in the process to implement the necessary changes to deliver sustainable improvements in Aryzta, as mandated by the overwhelming shareholder endorsement at the EGM (extraordinary general meeting) on Sept. 16. Our plans will be presented at the upcoming AGM (annual general meeting).”

The AGM is scheduled for Dec. 15.

Patrik Schwendimann, an analyst with Zürcher Kantonalbank, wrote in an Oct. 26 research note that it is now important that Aryzta has the freedom to negotiate with other parties about the sale of individual subsidiaries.

“We continue to believe that an exit from North America is the most likely scenario,” Mr. Schwendimann said. “We consider a sale multiple EV/sales of 0.6x to 0.8x to be plausible, which would correspond to around €750 million to €1,000 million. Aryzta could thus reduce a significant part of its normal debt. … The risks remain very high, but a successful sale of the activities in North America would be a very important cornerstone for a successful turnaround.”

Discussion on a potential public tender offer between Elliott Advisors and Aryzta AG first surfaced on Sept. 10. Since that time, Aryzta has held an extraordinary general meeting and published the annual results for the 2019-20 fiscal year.

On Oct. 20, Veraison, a major shareholder in Aryzta, called on the Schlieren-based company to come to a quick decision on potential takeover talks.

“Veraison as a major shareholder requests that the discussions with Elliott Advisors should be brought to a swift conclusion,” Veraison said. “Veraison expects both Aryzta and Elliott Advisors to comply with the ‘Put Up or Shut Up’ rule and to provide clarity by the end of this week regarding the potential takeover offer. This is in the best interest of all stakeholders as it allows the company and the new leadership to implement any required measures without delay.”

During an Oct. 6 conference call, Mr. Jordi stressed his belief that Aryzta has “a long, positive future.”

“My vision for Aryzta is one that is less complex, more focused and structured around its core markets and core businesses,” he said. “This will improve the sustainable financial performance and reduce its current excessive debt significantly. This business case is well supported by strong customer relationships, well-invested assets and experienced employees around the world.

“This facilitates calm, well-thought and orderly decision-making process around any change involving disposals, reorganization and debt repayment plans. This will allow Aryzta quickly to refocus on organic growth within our core markets and core businesses. I’m fully convinced that Aryzta has great potential, and we will do our utmost to put the company back on the road to success.”



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