Retail Food hires Gresham after United Petroleum lifts stake

Retail Food Group – the Australian listed food franchisor behind brands such as Donut King and Gloria Jeans – is shoring up its defences.

Retail Food Group – the Australian listed food franchisor behind brands such as Donut King and Gloria Jeans – is understood to have hired Gresham as a defence adviser.

It comes after RFG’s largest shareholder, United Petroleum, lifted its stake in the business to 19.9 per cent in November.

The move to shore up its defences no doubt has been brought on by fears of an opportunistic buyout offer.

United Petroleum already owns the business Pie Face, and the play would probably be to sell the RFG brands throughout its service station network.

RFG owns brands including Michel’s Patisserie, Brumby’s Bakery, Crust Gourmet Pizza and Rack ’Em Bones, and has turned around from being loss-making in the past year.

It recently purchased Cibo Espresso in what some thought could be a defensive tactic to fend off United Petroleum keen to embark on a buyout at an opportunistic price.

United Petroleum director Ari Silver had already increased his position to 12.36 per cent from 11.3 per cent, as disclosed on October 15.

The move added support to the group’s market value, taking it to $182m, with the share price at about 7.2c.

The stock has Thorney Investments among its major shareholders. Investors have hung on for a long time and would probably be keen to exit should a takeover bid or scheme of arrangement buyout proposal emerge – even though the price would probably be viewed as highly opportunistic.

RFG has recovered from most of its past challenges, which include losses and a probe from the Australian Competition & Consumer Commission over its dealings with its franchisees.

For the year to June it generated a $5.8m net profit, after generating a loss in the previous corresponding period.

United Petroleum describes itself an Australian petrol retailer and importer. It was established in 1993 and has about 500 petrol stations in Australia. The company bought Pie Face in 2017 and subsequently rolled it out to many of its service stations.