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Hong Kong-based activist fund Oasis Management has built a stake in the convenience foods group Greencore, raising the prospect of a shake-up at the UK’s biggest sandwich maker.
Oasis owns just under 5 per cent of the stock, putting it among Dublin-based Greencore’s top 10 shareholders but below the disclosure threshold, according to two people familiar with the matter. The fund manager has owned the London-listed stock for several years but has begun buying up shares more aggressively since last summer.
Oasis was frustrated with Greencore not paying out a dividend since 2020, after suspending them because of the Covid-19 pandemic, according to a person familiar with the fund’s thinking. This is despite having lower debt levels than rivals such as Premier Foods and Bakkavor Group, which both pay a dividend.
Greencore did complete a £50mn share repurchase programme recently, but a person familiar with Oasis’s thinking described them as “really small”. Greencore chair Leslie Van de Walle said at the full-year results in November that the company retained the “ongoing flexibility” to announce fresh buybacks, relaunch the dividend, or do both.
The fund also wanted Greencore’s management, led by its chief executive Dalton Philips who previously ran DAA, the Irish state-backed airports operator, to do more to revitalise the languishing share price, the person said. Oasis was expected to continue buying shares and would cross the disclosure threshold of 5 per cent in the coming weeks, a person said.
Greencore is the latest consumer company in the UK to be targeted by Oasis after several successful activist campaigns. Last year, Oasis, which largely owns stocks in Japan, became the biggest shareholder in The Restaurant Group before the Wagamama owner agreed a £506mn sale to private equity group Apollo. That netted Oasis a £40mn profit. It also previously took aim at Greencore’s rival Premier Foods.
Sales at Greencore, which supplies packaged food products to almost every big supermarket chain including Tesco and M&S, have been buoyed by workers returning to offices following the pandemic. The group has also managed to weather high food inflation. However, its share price has underperformed rivals.
Shares in the group are down about two-thirds on their pre-pandemic peak, valuing the sandwich maker at £500mn at market close on Thursday.
Daniel Wosner, managing director at Oasis who oversees its European shareholdings, had met the board and management several times — and relations were civil, the person added. One of Greencore’s board directors is Alastair Murray, who was previously finance chief of Premier Foods and whom Oasis played a part in removing from his role.
Greencore, which sold 779mn sandwiches and 132mn chilled ready meals last year, said in a first-quarter trading update in January that it was benefiting from improved profit conversion year-on-year, as inflation eased. Like-for-like sales were up 5.8 per cent on revenues of £441mn in the 13 weeks to the end of December.
Oasis did not immediately respond to a request for comment. Greencore declined to comment.