Premier Foods investor Oasis Management has called for the British canned foods maker to sell its well-known Batchelors Soup brand to improve its financial outlook and create funds for investment.
The Oasis call was rejected by Premier, which said it would not sell one of its "jewels", in the latest twist in a proxy fight which has erupted ahead of its annual general meeting of shareholders scheduled for later this month.
Premier's board said in an earlier statement it had the backing of a third influential shareholder advisory firm to reappoint chief executive Gavin Darby, who Oasis wants fired.
The Hong Kong-based investor said that even on conservative assumptions, selling Batchelors would generate 200 million pounds ($265 million) in proceeds, or more than 60 percent of the company's current market capitalisation.
'Solid Footing'
"Selling Batchelors would put Premier Foods on a solid footing and strengthen the Company for the benefit of all of its key stakeholders including staff, pension scheme members and shareholders in one single swoop," Oasis said in a statement.
"Oasis does not seek for any of the proceeds to be directly returned to shareholders but instead be used to de-risk the company and improve its business and long term prospects."
Premier is one of several European companies which have been targeted by activist investors, with Oasis last week questioning the board's culture after its own chairman Keith Hamill called some of the British firm's brands "weak cards".
Oasis, which was founded in 2002 and bets on equity and debt markets, says that Darby has no credible strategy for rousing the company from a decade of sluggish performance since the 2008 financial crash.
Thursday's demand contrasts with statements last week in which it emphasised that Premier had strong brands which it needed to manage better.
A spokesman for Premier said that it had held exploratory talks in the past on selling Batchelors, but had not been able to agree a satisfactory price.
"What Oasis is proposing is not practical, its a short term solution, but not practical anyway," the spokesman said.
"We are not going to sell one of the jewels in the crown of the company."
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
