Founder of US activist investor Engine Capital wants to shake up C&C board and maximise value at the drinks conglomerate
Last week, activist investor Engine Capital, which owns just under 5pc of UK-listed C&C, published an open letter proposing two directors for the group’s board. It hopes they will be appointed at C&C’s upcoming AGM on August 15.
In June, the US private investor took its concerns about the drinks business public when it published a scathing open letter that branded C&C a “perennial underperformer” and called for a sale of the business.
Various issues have arisen in recent years, including accounting errors
In response to questions from the Sunday Independent, Arnaud Ajdler, founder and portfolio manager of Engine Capital, described C&C’s performance as poor, noting various problems in recent years, including accounting errors.
“So, the company has had issues over the last few years which led us to this view that at this point, rather than try and hire a fifth CEO in the next 12-18 months, how about we consider all options to maximise value, including what buyers would be willing to pay for the different assets,” he said.
Ajdler said there were several options open to C&C and its board.
“It is possible the company stays standalone but focuses more on profitability,” he said. “It is possible that they sell some assets but the rest of the business remains public but again with more focus on profitability. It is possible that the entire company gets sold.
C&C makes Bulmers cider. Photo: Getty
“We want everything to be on the table,” he added. “Shareholders have suffered enough over the last few years under this board.”
The two directors Engine Capital hopes to add to the C&C board include Ryan Dubin, an investment professional at Engine Capital, and Alan Hibben, a former managing director of M&A at RBC Capital Markets.
Ajdler said Engine Capital was not trying to replace directors but add two people with “very relevant backgrounds and a shareholder mindset”.
“Our pitch to shareholders is – what is the downside? Instead of electing the eight directors nominated by the company, why not elect 10 directors, including our two directors who have great backgrounds and skin in the game – what’s the downside to bringing this fresh outside perspective in the boardroom?”
In June Engine Capital called for a sale of the business
Ajdler claimed Engine Capital had tried to engage with C&C privately over the last few weeks but that it “did not go very far”.
C&C noted the open letter and said it has “always engaged openly with its shareholders, and will continue to do so”.
“This includes regular dialogue with Engine since it invested in the company, and in particular since its open letter of June 24, 2024, and its notification of intention to propose the appointment of additional directors to the board. The board of C&C is reviewing the contents of Engine’s recent letter and will provide a response in due course.”