C&C Group has said it will “work constructively” with activist investor Engine Capital to appoint a new non-executive director “with capital markets expertise” at its AGM later this month.
It comes after Engine proposed two of its own candidates for election to the C&C Group board, arguing current leadership had “insufficient financial skillsets, especially in the areas of capital allocation, capital markets and M&A”.
However, Engine had now agreed to withdraw its proposed nominees for election, and would vote in support of all resolutions proposed at the AGM, C&C Group said.
“The C&C Board and Engine have agreed to put in place a co-operation agreement and work constructively together in the best interests of the company, all its shareholders and wider stakeholders,” C&C Group said. “Under the agreement, the company will commence a process to appoint one new non-executive director with capital markets expertise to the board from a shortlist of nominees agreed with Engine.
“Under the agreement, Engine will withdraw its two proposed nominees for election at the upcoming annual general meeting on 15 August. The agreement includes customary governance, standstill and voting provisions.
“Engine has confirmed it will vote in support of all resolutions proposed at the AGM in line with the board’s recommendations.”
Engine, which owns a 5% stake in C&C, has been pushing for change it believes necessary to fully realise the value of the Tennent’s brand owner.
In June, its managing partner Arnaud Ajdler penned an open letter describing C&C Group as a “perennial underperformer” that had been blighted by “structural and self-inflicted problems”.
The structural issues, Ajdler said, related to C&C’s “small size and the complexity of its portfolio”. This, he said, made it “more difficult for public market investors to evaluate, [do due] diligence, and value it”.
The company had also, Ajdler said, “suffered from a host of self-inflicted issues” such as a €125m goodwill impairment tied to its Magners brand, and been blighted by a lack of strong leadership, having appointed four different CEOs in less than four years.
C&C Group ought to consider an outright sale which, based on “relevant and comparable transactions” could see shareholders receive a 58% premium on the company’s current trading price, Ajdler said.
No comments yet