Kidder Williams, the high-profile Melbourne deal makers specialising in agribusiness and food, have been drafted in by the board of Bubs Australia as the company reworks its market strategy in a bid to save its share price.
There’s been plenty of instability at infant formula producer Bubs, with the departure of its former chairman, Dennis Lin, and chief executive, Kristy Carr, this year. Both Lin and Carr are part of a push to remove the current board, led by ex-King & Wood Mallesons partner Katrina Rathie.
Bubs shares are down more 75 per cent over the past year, or 45¢, and last traded at 14¢.
The company is undertaking a strategic review, with a focus on its strategy in China. The view internally is that, under Lin and Carr, the company built up extensive unsold inventory due to arrangements made with its Chinese distribution partner, AZ Global.
David Williams, the managing director of boutique corporate advisory Kidder Williams, will take the lead advising Bubs.
Williams has dominated the agribusiness sector for 30-plus years, most recently being helping Pure Foods Tasmania kick-start growth. He was also on defence at Tassal last year before the salmon producer was acquired by Canada’s Cooke Aquaculture in a $1.7 billion deal.
Sour milk
The appointment comes after a period of turmoil at the infant formula company, which publicly kicked off in May after the removal of Carr as chief executive due to her failure to “comply with reasonable board directions”. Lin’s employment with Bubs also was terminated with immediate effect.
The sudden move represented a change in view by the board with Bub’s share price under significant pressure and the company’s key China business posting slower-than-expected sales.
Since then, Carr has begun leading a group of dissident investors who plan to spill the board and install a former a2 Milk executive, Peter Nathan, to lead the infant formula manufacturer. Bubs co-founder, Anthony Gualdi, and the company’s largest customer in China, AZ Global, are also involved in the push to roll the board. Their combined holdings tally just over 5 per cent, sufficient to call, earlier this month, for an extraordinary general meeting.
Rathie, in an interview with The Australian Financial Review, has already accused Bubs’ former management of placing “a lot of eggs in one basket” with AZ Global.
“They effectively gave control to AZ Global and its affiliates, despite the very strong stated concerns of the non-executive directors,” she said this month.