Paul Singer's Elliott Offers To Buy McDonald’s Supplier Aryzta

Paul Singer of Elliott Management
Paul Singer.
Photo credit: World Economic Forumlicensed under CC BY-NC-SA 2.0

Elliott Management, a $40 billion+ hedge fund chaired by the American billionaire investor Paul Singer, has made an offer to acquire Aryzta, which is a Swiss specialty food business focused on frozen bakery products that is a major supplier to the fast-food chain McDonald's. 

Elliott has proposed to acquire the publicly-traded Aryzta for 0.80 Swiss francs ($1.1) per share, amounting to an aggregate price of about 794 million Swiss francs ($872 million). 

In a statement, Elliott countered speculations and doubts regarding financing for its proposed Aryzta acquisition and noted that "financing of the potential offer is available and that refinancing arrangements for the Company’s existing debt are at a very advanced stage."

In recent years, Aryzta has struggled to stay relevant and has seen its revenue fall by a significant margin. The company's woes were further compounded by the coronavirus pandemic which saw many of its plants shuttered in the early months.

As revenue has fallen over the years, Aryzta has been burdened with a heavy debt load which currently stands at nearly $2 billion. As such, a sale of the company has long been speculated, and now with Elliott Management, the world's biggest activist hedge fund, being a bidder.

Elliott Management is a very successful activist hedge fund that's racked up a brash reputation along the way. The hedge fund has waged wars with everything ranging from family-controlled conglomerates in South Korea to the sovereign nation of Argentina and many times emerged victorious. 

Recently, Elliott sparred with the social media company Twitter and its CEO Jack Dorsey but settled with a compromise at the end. 

In a separate statement, Aryzta noted of having received a non-binding offer from Elliott but said that the offer was "subject to certain conditions, some of which cannot be satisfied,". The company also speculated on Elliott being able to secure financing for its proposed takeover.

Aryzta said that it has hired financial advisors for asset disposals and will explore alternatives to continue outside of Elliott's proposed takeover.