C&C Group shareholder lobbies drinks firm to shake up board

Drinks manufacturer C&C Group has again faced criticism from its shareholder, Engine Capital, which urged the need for boardroom change after “years of underperformance”.

In June, the US private investor, which owns just under 5% of C&C’s shares, took its concerns about the drinks business public, publishing a scathing open letter branding the company as a “perennial underperformer” and encouraging it to conduct a strategic review in preparation for a sale.

The investor has now followed this up with a further open letter aiming to persuade C&C, which manufactures drinks including Tennent’s lager and Magners and Bulmers cider, to accept its nominations for two “highly qualified” director candidates.

Engine Capital’s proposed personnel are experienced investor and investment banker, Ryan Dublin, and Alan Hibben, a seasoned former investment banker and private equity executive.

The shareholder’s managing member Arnaud Ajdler wrote: “Unlike the current board, our candidates have skin in the game (both candidates have committed to buy shares personally), an ownership mentality and the relevant financial background to help create a sense of urgency and focus on delivering long-term value for all shareholders and stakeholders.”

Ajdler believes it is “critical” for C&C to add directors “with relevant financial skillsets (such as capital allocation, capital markets and M&A) and a shareholder mindset to assist the company”.

He detailed that following Engine Capital’s previous letter, it had approached C&C’s board to discuss director representation but that they showed “absolutely no interest in trying to resolve this matter privately” ahead of the drink’s firm’s annual general meeting on 15 August.

Ajdler outlined: “We shared the names of several candidates with the board and suggested the directors interview our candidates. They never followed up. This disappointing engagement with the board has led us to conclude that shareholder-driven change is urgently needed following years of underperformance.

“We believe the current directors lack a sense of urgency to resolve the company’s issues and maximise value for shareholders.”

In response, C&C stated: “C&C has always engaged openly with its shareholders, and will continue to do so. This includes regular dialogue with Engine since it invested in the company, and in particular since its open letter of 24 June 2024 and its notification of intention to propose the appointment of additional directors to the board.

“The board of C&C is reviewing the contents of Engine’s recent letter and will provide a response in due course.”

At the end of June, the drinks supplier posted a £96m loss following accounting errors discovered in its previous results, which prompted then-chief executive Patrick McMahon to stand down from his role.