Drinks demand

Activist calls for break up of Tennent’s owner C&C

Tennent’s is owned by the Dublin-based C&C

An activist hedge fund has called for the break-up or sale of Tennent’s lager owner C&C Group, saying the drinks company is a “perennial underperformer”.

Engine Capital, which owns just under 5% of the Dublin-based beer and cider maker says the company suffers from a combination of “structural and self-inflicted” problems.

It has called on the board to explore “strategic alternatives”, arguing that shareholders could “conservatively” receive between 239p and 263p per share in value via a sale, which would represent a 58% premium to the company’s current price at the midpoint of this range.

Shares in C&C, which owns Bulmers and Magners cider, rose by 1.5p to close at 160.5p.

In an open letter to the board, Arnaud Ajdler, managing member of Engine Capital, based in New York, said the Magners cider and Tennent’s lager maker was “deeply misunderstood and undervalued”.

It added: “C&C remains a unique and strategic asset, which is why we are confident that buyers would pay a price that is far superior to its standalone value.”

Responding, the board said it welcomed “feedback” from all shareholders and had “a clear focus on creating shareholder value”.

It said that at its recent year-end results update, the underlying performance of the business has been in line with expectations and progress had been made in returning capital to shareholders.

It added: “Operationally, the key priority is to deliver the substantial actions currently being progressed at pace throughout the business, driving forward both brand and distribution revenue and improving margin, while returning up to €150 million by the end of 2027.”

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