Premier Foods CEO to step down after battle with activists

Bloomberg

Premier Foods Plc’s chief executive officer will step down as the maker of Bisto gravy and Mr. Kipling snacks weighs asset sales following pressure from activist hedge fund Oasis Management Co.
CEO Gavin Darby will leave on January 31, the company said on Tuesday in a statement. Premier Foods also said it is in discussions with potential buyers of its Ambrosia brand of frozen custard. Oasis had pressured the company to sell another brand.
The shares rose as much as 3.7 percent in early London trading.
The moves follow a drawn-out battle with Oasis, which had been urging the board to oust Darby, saying he drove the company into a “zombie-like state.” In July, shareholders voted in favour of keeping the CEO in place, even after hedge fund Paulson & Co. joined the call for new management.
Darby, who has been at the helm for almost six years, was under pressure to revive profit and reduce debt. The CEO faced additional scrutiny after McCormick & Co. abandoned a takeover effort in April 2016, saying Premier’s board wanted too high a price. The decision to step down was related to a change in strategy and had nothing to do with the Oasis campaign, Darby said on a call with reporters.
“The timing is all to do with the announcement we made today,” Darby said. “This is the final step for me in terms of the transformation.”

Soup, Noodles
The company chose Ambrosia for a possible sale, rather than the Batchelors soup and noodle brand, whose divestment Oasis had sought.
The pudding label is “ultimately more valuable to somebody else than it is to us and it’s easy to extract industrially from Premier Foods,” Darby said.
“Under his tenure Premier Foods has become a demonstrably more effective operator and it has made commendable progress with brand development,” Shore analysts Darren Shirley and Clive Black wrote in a note.
Oasis did not immediately
respond to a request for
comment.