Activist Clearway calls for split of nutrition company Glanbia – letter

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By Simon Jessop and Padraic Halpin

LONDON (Reuters) – Activist investor Clearway Capital has written to the board of Glanbia calling for a break-up of the Irish nutrition company to help boost its value to more than 6 billion euros ($6.33 billion), a letter seen by Reuters showed.

The North America-focused group comprises the Glanbia Performance Nutrition (GPN) unit, which produces sports nutrition products and brands such as SlimFast, and Glanbia Nutritionals (GN), which produces dairy and other products.

In a letter, dated April 19, Clearway said the company’s shares were undervalued and should be trading at more than 21.08 euros a share, almost double their value on Tuesday.

It cited persistent underperformance at the GPN unit, which had issued frequent profit warnings, said it had a confusing corporate structure and had made questionable capital allocation decisions.

As a result, Glanbia stock was trading at a 55% discount to its closest peers, “despite owning assets and brands which in our view are of superior quality to those of many direct competitors,” the letter said.

A Glanbia spokesperson said the company had performed strongly in 2021, was well positioned to deliver on its strategic growth agenda and would continue to engage with all its shareholders.

“Glanbia plc has a clear strategy addressing key consumer health and wellness trends as a global, sustainable, purpose-led nutrition business.”

Laying out its plan for the company, Clearway said it wanted the board to look immediately at spinning out the company’s GPN unit and dual-listing it in New York and Ireland, at the same time as disposing of its European cheese joint ventures.

Together, Clearway said it expected the steps to unlock over 10.88 euros in additional value per share.

($1 = 0.9465 euros)

(Reporting by Simon Jessop; editing by Barbara Lewis)