C&C Group shareholder Engine Capital has called for new leadership on the board, a month after calling for the sale of the drinks company.
In June, the investor group – which owns just over 5% of the drinks giant – called for changes in the company in the face of a number of ‘structural and self-inflicted problems.’
These include the small size and complexity of C&C’s drinks portfolio the appointment of the company’s fourth CEO in four years.
In an open letter published 30 July, Engine Capital once again referred to the Bulmers owner as a ‘perennial underperformer,’ saying it had witnessed ‘succession missteps, strategic mistakes, execution blunders, accounting adjustments due to deficient internal controls, goodwill impairment and the mismanagement of an enterprise resource planning implementation.’
The shareholder added, however, that it still believes the group ‘owns unique and strategic assets.’
Candidates
Engine Capital claimed that C&C Group had not engaged in discussions about board representation privately, leading to the open letter.
The letter, signed by the founder and portfolio manager of Engine Capital Arnaud Ajdler, proposed Ryan Dubin and Alan Hibben as candidates for the board.
Dubin is an investor in Engine Capital Management and has experience in finance, capital allocation, capital markets and mergers and acquisitions.
He is also a C&C shareholder, a feature which the letter says adds incentive to board members as they seek to improve the business.
Hibben is a corporate director with experience as a former investment banker and private equity executive.
Engine Capital also proposed that the two candidates be elected to serve alongside the current board, rather than replacing any of the eight members.
‘Regular Dialogue’
In response to the open letter, C&C published a statement the following day on 31 July.
The statement said, ‘C&C has always engaged openly with its shareholders, and will continue to do so.
‘This includes regular dialogue with Engine since it invested in the Company (C&C), and in particular since its open letter of 24 June 2024 and its notification of intention to propose the appointment of additional Directors to the Board.
‘The Board of C&C is reviewing the contents of Engine’s recent letter and will provide a response in due course.’
The group recently announced the appointment of Andrew Andrea to the newly formed role of chief financial and transformative officer.
Andrea took on the role with immediate effect, aiming to lead the company’s transformation programme focused on simplifying operations and increasing efficiencies across the business.
C&C Group’s 2024 Annual Meeting, which is the setting for Engine Capital’s candidates to potentially be elected, takes place on 15 August.
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