Magners Cider owner C&C has faced pressure from investor Engine Capital to launch a strategic review process that could lead to the company going private.
Engine Capital said in a letter to C&C’s board: “C&C has been a perennial underperformer and today is deeply misunderstood and undervalued by the market because of a combination of structural and self-inflicted problems.”
It argued that C&C’s board had an opportunity to maximise shareholder value through a strategic review aimed at a sale and that management should be incentivised to ensure the best possible outcome.
The investor’s demand comes amid C&C’s share price has plunged 52% in the last five years as it faced challenges with its leadership in recent years, leading to a turnover of CEOs in under four years and with a fifth expected soon.
Earlier this month the drinks company’s chief executive Patrick McMahon has resigned “with immediate effect” over the revelation of a series of financial errors.
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Accounting mistakes led to the company taking a €17m charge and McMahon, who was chief financial officer at the time of the accounting errors, agreed to step down.
C&C chair Ralph Findlay stepped into the chief executive and is expected to remain in post for 12-18 months while it searches for a new CEO.
Engine said: “We firmly believe that C&C is at a crossroads today. The board has a timely opportunity to maximise value over the coming months under the leadership of Mr Findlay.
C&C Group also owns Scottish beer Tennent’s and Irish cider Bulmers, alongside Magners Cider.
