The future of Premier Foods boss Gavin Darby is looking increasingly uncertain this weekend after two of the company’s biggest shareholders backed an aggressive campaign to oust him.
Wall Street hedge fund Paulson, which owns a 6.2pc stake, said he had failed to deliver on a promise to create shareholder value after knocking back a takeover bid from US spice maker McCormick in 2016 and selling a large stake to Japan’s Nissin instead.
“Unfortunately, the board rejected an offer from McCormick at 65p claiming Gavin could create more shareholder value. Today, the stock languishes at 40p while the management and the board keep their comfortable jobs,” Orkun Kilic, a portfolio manager at Paulson, said.
“The company desperately needs new management who are willing to put stakeholders’ benefits first and we hope this upcoming AGM will be a reflection point.”
Another top-10 shareholder said: “We plan to vote against Gavin Darby’s re-election. After the failed McCormick bid, we don’t think he can be trusted.
“He failed to engage with shareholders over the offer and instead agreed a deal with Nissin that benefited one shareholder but penalised the rest. He then put out targets which have not been met.”
Oasis Management, an activist investor with 9.3pc of the shares, has led the campaign for Mr Darby to go, lambasting him for “years of persistent shareholder value destruction and poor financial performance”, and accusing him of “five years of failure”.
It has also attacked Mr Darby’s pay, which it says is out of proportion with Premier’s diminished size. Last week, Oasis called on the company to offload its Batchelors soup and noodle brand to raise cash to pay down debt.
Despite the growing revolt, the board of Premier is standing by Mr Darby. Shareholder advisory groups Glass Lewis and ISS have both backed his re-election. Shareholders will vote at the company’s AGM on July 18.