Cuisine de France owner's shares surge on French sale agreement

Shares in Cuisine de France owner Aryzta surged by as much as 9% on the group announcing a deal to finally sell the bulk of its stake in French frozen food retailer Picard.

The Irish-Swiss baked foods business said it has received a €156m binding offer, from Invest Group Zouari (IGZ), for 43% of its Picard stake.

The sale - which is reliant on regulatory approval - is expected to complete before the end of the year.

Aryzta - which is due to report annual results next Tuesday - will retain a 4.5% share in Picard, which it said it will monetise at a later stage.

Combined with prior dividend income from Picard, Aryzta said the total money made back from its stake comes to €247m.

Net proceeds from its ongoing non-core asset disposal will have reached €380m after this sale.

Aryzta CEO Kevin Toland.

"On completion of this transaction, Aryzta will realise some 85% of its asset disposal objective," said group chief executive Kevin Toland.

"The steps we have taken in 2019 have established clear foundations on our path towards stability," he said.

Aryzta bought into Picard, to the tune of €447m, in 2015. It has been trying to sell Picard for the last two years. The expensive purchase - along with underperformance in North America - has been seen as a prime motivator in Aryzta's slide in recent years, with investors critical of a deal that significantly increased Aryzta's debt levels. The group's shares have fallen 35% to date this calendar year and are down nearly 70% in the past 12 months.

Mr Toland said the IGZ offer represents Aryzta's "earliest practicable opportunity to realise the maximum deliverable value" for its Picard stake.