Premier’s Darby & Joan

FT - Lombard

Kate Burgess

 

Keith Hamill, chairman of Mr Kipling  Premier Foods, plays a loyal Joan to Gavin Darby, writes Kate Burgess. The exceedingly tanned Mr Hamill says shareholders should leave Premier’s chief executive to continue whipping up Angel Delight and pouring Ambrosia custard into takeaway pots.

 

Mr Hamill is responding to calls from 9 per cent shareholder Oasis that he boot Mr Darby off the Monopoly board. Oasis points out that since Mr Darby joined Premier, five years ago, its shares have fallen a third, costing investors £239m. But Mr Darby has been paid millions to miss multiple targets, Oasis claims. It notes that, in 2016, Premier’s board snubbed a 65p-a-share approach from US spice maker McCormick and Mr Darby promised a tie-up with Japanese noodle maker Nissin would accelerate sales growth. A year later Mr Darby cut those expectations in half. For that, says Oasis, Mr Darby should never pass Go and collect £200 again.

 

Mr Hamill disagrees. Premier is in a difficult place: £496m in debt, £4.5bn of pension liabilities, and rising costs. Replacing Mr Darby would be disruptive. Better to keep him chipping at the debt and pension obligations. Mr Hamill is against auctioning assets. Like the Old Kent Road in Monopoly, no one wants Batchelors or Bisto.

 

In fact, the situation is not unlike the longest game of Monopoly ever played, 50 years ago. To help them set a new record, players were given unlimited access to debt. But it did not work: the game ended after 70 hours. Possibly because, like Oasis, some lost their patience and tipped the board over.