Beverage business C&C has forged an agreement with activist shareholders that will involve the appointment of a fresh non-executive director, selected from a mutually agreed list. Engine Capital, an activist investor, had expressed their desire for C&C to integrate board members with a background in mergers, acquisitions, and capital markets. This would contribute to performing a “strategic review” to optimise the company’s value.
In compliance with the new pact, Engine, carrying just below a 5 per cent stake in C&C, will pull back two candidates it initially planned to nominate for the imminent annual general meeting next week. Additionally, it has committed to backing all motions raised at the AGM as per the recommendations of the board.
Recently, the pressures on C&C have been escalating. The New York-based hedge fund has persistently encouraged the beverage firm to consider selling, arguing that it could yield a significant 58 per cent premium compared to its current stock price.
However, after productive dialogue with Engine and other stakeholders, C&C managed to negotiate a cooperative agreement. The company believes this accord will initiate a mutually beneficial collaboration, in the best interest of all concerned parties. Its terms also incorporated governance, standstill, and voting stipulations.
C&C had already been speculated to be a prospective acquisition prospect. CEO Patrick McMahon departed abruptly in June, only a year into his tenure, following an accounting discrepancy that compelled the company to amend its earnings record for the previous three years, showing a net loss of €5 million. This issue led to a €150 million goodwill depreciation, primarily attributed to its Magners cider division.