Are Premier Foods about to be Stuffed?

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Premier Foods (PFD), makers of the famous Paxo stuffing, may itself be about to be stuffed by one of its largest shareholders. Oasis Management Company Ltd who own nearly 10% of PFD, is encouraging all shareholders to vote for the removal of the current CEO, Gavin Darby, at the upcoming AGM on the 18th July. Oasis claim that:

“Gavin Darby has driven Premier Foods into its current “zombie-like” state–he has no credible strategy to return Premier Foods to growth. Long-suffering shareholders need new energy, leadership and fresh ideas. The status quo is  no longer tenable for all stakeholders – shareholders, pension holders and employees.”

You can read their main arguments in this presentation pack.

It is clear that the Premier board intend to resist this proposal and they have already issued a short statement to that effect :

“The Board strongly believes that Gavin Darby is the best person to lead the Company and to execute the Board’s strategy. Having regard to the best interests of the Company’s shareholders as a whole and its other stakeholders, the Board unanimously recommends that shareholders vote in favour of Gavin Darby’s re-election as the Chief Executive Officer at the Company’s AGM and will communicate further in due course”

We await further details of the board’s arguments which will no doubt attempt to refute the arguments deployed by Oasis.

So, quite a bunfight brewing it would appear. The food metaphors will be flying as this one progresses.

If any members are shareholders in Premier and wish to discuss these matters in more detail with either of the protagonists, then please contact Mike Dennis, via email mike.dennis (at) and he will try to organise a suitable meeting.

  1. niq says:

    Speaking as a former PFD holder who sold out some years ago, I’m not convinced it’s reasonable to blame its woes on current management. It’s been zombified since the crash of 2008, when excessive debts came home to roost. And on top of the self-inflicted woes of pre-2008 hubris, government money-printing turned its pension obligations into a millstone. They’ve lost all their best brands and are left with a tired portfolio of last-century brands, and a lack of R&D resources to update it.

    It’s all very well for an activist investor to seek change, but where in their proposals is there any scope for improvement (other than in reducing CEO remuneration)? If I still held a stake, I’d be hoping for a deep-pocketed White Knight interested in investing substantially to refresh the business and make it fit to compete with the global food giants.

  2. Michael Dennis says:

    Thanks niq, I agree its not entirely the fault of Gavin Darby but you would have thought that, by now, he could have done something to sort out the gearing – maybe a placing would have helped to strengthen the B/S. And, in hindsight, the offer from McCormick should have been more seriously considered – maybe they WERE the White Knight that Premier needed?

    I have no idea what changes to strategy Oasis would desire but I assume they would be along the lines of the strategic review that was recently completed and which (according to Oasis) the board have rejected. (I can find no details on this review).

    On balance, I think Gavin Darby has had long enough to make an impact but hasn’t done so. If I were a holder, I would think it time to give someone else a chance with a new strategy.

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