A group of activist shareholders at embattled Swiss-Irish baked goods company Aryzta have succeeded in their efforts to bring significant changes to the board.
At an extraordinary general meeting (EGM) in Switzerland this morning, shareholders voted out chief executive Kevin Toland from the board of the company.
However, Mr Toland has told the board that he intends to remain on as CEO and act in the best interests of the business and shareholders.
The board of the company had opposed the motion put forward by the activist shareholder group, comprised of investor Veraison and the firm's largest shareholder Cobas Asset Management.
Shareholders have also voted in Urs Jordi as chairman of the board, to replace outgoing chairman Gary McCann.
Two other nominees, Armin Bieri and Heiner Kamps, who were put forward by the activist shareholder group, have also been voted onto the board and the remuneration committee.
Addressing the meeting from Dublin, outgoing chairman Gary McGann acknowledged that the financial turnaround of the company had been slower than expected and hoped for, and he apologised for that.
"I do however believe that if we keep doing the right thing, executed well and in the context of the right strengths, the market will eventually reward it," he told shareholders.
Mr McGann said that CEO Kevin Toland had only been at the helm of the company for three years.
"It would be difficult to over state the challenges faced by Kevin and his senior team and the circumstances inherited by them ranging from cultural, structural, commercial, operational and strategic issues, all of which needed serious attention and in a number of cases deep remediation, Mr McGann stated.
He said significant progress has been made on all fronts in executing the leadership strategy.
"In our view there is no silver bullet or easy substitute to staying the course. This management team has worked tirelessly to turn the company around and will continue to do so," he stated.
He added that he strongly believes in time they will achieve their stated objectives.
Mr McGann said the board had tried to engage constructively with the activist shareholder group to try to arrive at a constructive solution.
"While we fully accept shareholders rights to effect change I continue to believe that the best interests of Aryzta are a proven coherent board and an executive team singularly focused on executing the turnaround strategy," he added.
The outgoing chairman said he believes the opposing side of the argument share a common hope for Aryzta to realise its full potential as the leading frozen bakery company in the industry.
"Where we differ is in how that can be achieved," he said.
Gary McGann said there was no certainty that the talks with Elliot Advisors about a possible takeover will definitively lead to an offer and the board was engaged in the talks with a view to maximising the strategic interests of Aryzta as a whole.
Incoming chairman Urs Jordi told the EGM that it is high time to lead Aryzta back to success.
He said the organisation needs to be streamlined and that he wants to push forward innovation because the industry lives off it.
Mr Jordi said now would be the worst time to sell the company.
The three new directors had come to support the company on its industrial path to success, he added.
The founder of Veraison Capital which holds 20% of the company's shares, Gregor Greber, said he was very happy that after four months of waiting the EGM was taking place.
He said the shareholder group had been founded in May in order to lead Aryzta to a better and more successful future and give a new perspective to the company.
Today was a happy day, and that is why everyone attending had been given a large Aryzta-made biscuit with a smiling face on it, he said, holding one aloft.
"Shareholders haven't had much to laugh the last couple of years, so cheer up," he added.
"We are aware that shareholders have suffered the last couple of years, heavily. But we also think it is about time to change leadership," the new chairman told today's EGM.
"Leadership means in any businesses, in any companies I have seen over my 30 years in Swiss capital markets, if you don’t have the expertise of the industry you are in, you will fail," he stated.
"And I don't see, with the exception of one person within the board of Aryzta today, baking experience," he added.
As a result he said they were proud to nominate three independent bakers to chair and lead the company into a great future.
Earlier, Annette Flynn announced that she would resign from the Aryzta board after today's EGM.
Aryzta had asked Ms Flynn to remain as a member of the board due to the importance of her role as Audit Committee Chair.
It said this was due to the increased complexities of the financial year-end in light of the resignation of the company's CFO, the recent appointment of new auditors at the 2019 AGM and the challenging financial circumstances arising from Covid-19.
In a statement, the company said that while the board continues to believe that Audit Committee continuity, in these circumstances, represents the best interests of Aryzta, Ms Flynn has accepted the expected decision of shareholders.
Yesterday, the company's choice for chair to succeed Gary McGann - Andreas Schmid - announced that he was withdrawing his candidacy.
Aryzta, the group behind the Cuisine de France brand, confirmed last week that it was in advanced talks with US hedge fund Elliott about a potential takeover.
Shares in the company were lower in Dublin trade today.