Premier Foods backs CEO after Oasis attempt to oust him

Mr Kipling and Bisto owner Premier Foods hit back at major shareholder Oasis Management after it tried to oust chief executive officer Gavin Darby, who has been in the role since 2013.

Premier - which found out last month that Oasis was planning on voting against the re-election of Darby at the annual general meeting later this month and was encouraging others to do the same - has written to shareholders to support the CEO.

Since June, Oasis has made several "highly critical" comments about Darby, which Premier rejected on Monday.

"The board has confidence in Gavin Darby and firmly believes that he and the management team are best placed to run the business and execute the company's strategy," it said.

It pointed out that Darby took over the role of CEO at a time when Premier was in "serious" financial difficulties, with net debt of nearly £1bn.

"Since then, Gavin Darby has been successfully transforming Premier Foods throughout a challenging industry back-drop by undertaking significant cost and efficiency initiatives, properly integrating the businesses which had previously been acquired, introducing modern sales and marketing processes and establishing positive relationships with customers.

"The company's most recent financial results demonstrate good progress. In 2017-18, the company reported its strongest rate of total sales growth in over five years, international sales growth of 25% and a reduction in the ratio of net debt to EBITDA to 3.6x. The board now expects the ratio of net debt to EBITDA to be below 3.0x by March 2020, ahead of the previous estimates."

Premier said there was no guarantee that a manager with equivalent or superior skills could be recruited if Oasis's proposal was successful.

Chairman Keith Hamill said: "The board believes that Gavin Darby is running the company well. In contrast, the Oasis proposal offers no constructive solution to the challenges being addressed and involves the risk of creating instability at a time when continuity is important in completing the work being done. The board unanimously recommends that shareholders vote in favour of Gavin Darby's re-election as CEO at the AGM on the 18th July 2018."

At 1340 BST, the shares were up 1.3% to 38.40p.