DAVY VIEW

The rejection of Elliott’s offer is unsurprising given previous pronouncements. Board changes at the recent AGM now give significant (disproportional) representation to the hybrid holders. This adds a new variable to an already complex equity equation. In the absence of a takeover, the two remaining value levers for ARYZTA include asset disposals (at healthy multiples) and productivity initiatives (margin). For the equity to surpass the Elliott bid level, these workstreams will need precision execution coupled with a material re-rating of the remaining group.