Mr Kipling cakes firm Premier Foods has announced it will launch a strategic review, bowing to pressure from activist investors and paving the way for a potential sale of the group.
The company said in a stock market announcement that, following discussions with its largest investors, Premier has decided to conduct “a review of its strategic options” for increasing shareholder value.
It is understood that one of the options is a potential sale of the group as the company grapples with large-scale pension liabilities and attempts to slash its £500 million debt pile.
Premier has come under intense pressure recently as activist investors Oasis and Paulson – who own more than 20% of the group – called for a radical shake-up.
They got their wish in November when chief executive Gavin Darby said he would stand down following criticism from Oasis.
The group had been critical of his strategy, in particular when he oversaw the successful defence of a takeover tilt from US firm McCormick in 2016.
In that year, instead of tying up with McCormick, Premier announced a collaboration agreement with Japan’s Nissin.
Premier has also recently scrapped plans to sell off its Ambrosia custard brand, blaming the current business climate, and last year abandoned the sale of its fast-growing Batchelors brand.
The firm is also being hampered by moves to stockpile raw ingredients ahead of Brexit.
Premier said on Wednesday that Daniel Wosner and Orkun Kilic – from Oasis and Paulson respectively – will join the board as non-executive directors, along with Simon Bentley.
Ian Krieger and Jennifer Laing will retire from the board.
Chief financial officer Alastair Murray is acting as interim boss while the hunt for a permanent successor to Mr Darby continues.
Shares in Premier were up more than 4% at 38.6p.