LONDON (Reuters Breakingviews) - Elliott Advisors is trying to raid the cookie jar. The U.S. hedge fund, led by billionaire Paul Singer, is planning a 793 million Swiss franc (733 million euros) bid for debt-laden baker Aryzta, maker of Otis Spunkmeyer biscuits. Yet with the pandemic easing, the Swiss group’s shareholders, which also include some activists, have good reason to hold out. Aryzta has all the criteria of a value stock. The baker, which supplies sesame-seed buns to McDonald’s, was once worth over $9 billion after the merger of IAWS and Hiestand in 2008. Yet years of mismanagement have seen revenue shrink from 3.8 billion euros in 2015 to just 2.9 billion euros in 2020, and the operating margin has collapsed. Aryzta now has a market capitalisation of 685 million Swiss francs, and net debt of 1.9 billion euros including hybrid bonds, equivalent to 7.4 times this year’s EBITDA. Elliott’s 0.80 Swiss franc per share offer represents a premium of 27% to Aryzta’s closing price of 0.629 Swiss francs on Nov. 18, the day Elliott first made the offer. But it comes just as the company has installed a new chairman, Urs Jordi, with the backing of activist shareholders. He wants to turn the group around and sell assets to cut debt, most likely the U.S. operations. Assume Aryzta can sell its North America business for around 10 times next year’s expected EBITDA. Using UBS estimates, it could be worth 788 million euros. The cash would cut debt to 1.1 billion euros. Give Jordi another year to turn around the remaining business, and it could generate EBITDA of 219 million euros in 2022, UBS analysts reckon. Apply again a roughly 10 times multiple, and the rump business could be worth 2.1 billion euros including debt, and its equity would be over 935 million euros – some 28% above Elliott’s offer. Sticking with the plan carries risks. The pandemic recovery could be slow and selling the U.S. operations would leave a less diverse business. So far, however, Aryzta’s largest shareholders, Cobas Asset Management and Veraison, who between them hold around 20%, per Refinitiv data, seem to be backing Jordi. Given the activists’ opposition, Elliott will probably have to raise its offer if it wants to take home the cookie.