Aryzta Announces Strategic Review as Market Value Plummets

Aryzta has announced a strategic review of the company as a result of another drop in its market valuation. The company behind Cuisine de France bread and doughnut maker Otis Spunkmeyer said it appointed financial advisory group Rothschild & Co “to undertake a review of all strategic and financial options available to the group to maximize value for the benefit of all of the group’s stakeholders”.

The move comes as Aryzta shares fell to another record low of 33 cent in Dublin on Wednesday and to 0.35 Swiss francs in Zurich, leaving the company with a market value of EUR350m. The company’s stock has fallen by roughly 98% over the past five years.

A spokesman said the review was initiated by the board with external input to address the decline in shareholder value. It is expected to be concluded by the end of July.

Aryzta has been struggling to halt a steep slide in its share price, which investors have linked to the group’s highly indebted and complex capital structure as well as ongoing problems with its US business.

The coronavirus health crisis has added to its woes, particularly in the US, where about 70% of its business is tied into quick-service restaurant chains, most of which have been forced to close because of the lockdown.

Cobas, Aryzta’s largest shareholder, has been pushing for changes since at least 2018, as the bakery company’s stock has fallen about 98% over the past five years.

Led by former DAA boss Kevin Toland, Aryzta said earlier this month is had secured a “precautionary amendment” to its financial covenants and outlined a number of steps taken to maximize cash and reduce costs to deal with the COVID-19 pandemic.

The company also said it had improved its liquidity position to in excess of EUR385m at the end of April, compared with EUR360m a month earlier.

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