Aryzta shares decline on lack of asset sale progress

Shares in Cuisine de France owner Aryzta fell by over 4% yesterday after the company tempered speculation it was closing in on a sale of its controversial 49% stake in French high-end food retailer Picard.

Shares in the Irish-Swiss baked goods group rose sharply late last week — jumping by nearly 7% on Friday — upon such speculation.

However, in a brief stock exchange announcement, Aryzta yesterday said it was still evaluating “alternatives” for its Picard shareholding, something it has already stated this year.

A new management team, led by chairman Gary McGann, is undertaking a strategy review after an erosion of investor confidence — fuelled by falling earnings and unpopular investment decisions — led to the recent departure of chief executive Owen Killian, chief financial officer Patrick McEniff and head of American operations John Yamin.

The purchase of 49% of a highly-indebted Picard, with a since waived-on option to buy the remaining 51%, was a chief bugbear of investors and a sale has been expected.

However, analysts suggested majority shareholder Lion Capital, or any other potential buyer, may look to pay considerably less than the €320m-€340m Aryzta’s share is estimated to be worth.

Aryzta said its financial and operational focus is on cash generation. It has already said any monetisation of the Picard stake will go towards strengthening its balance sheet.

The group will publish third-quarter earnings later this month.