Shares in Premier Foods have rocketed by 65 per cent today after the Mr Kipling and Bisto gravy owner confirmed it has rejected a second £496m takeover approach from United States rival McCormick, saying the offer significantly undervalued the company.
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At 60 pence, McCormick, known for its flagship spices and Lawry’s seasonings, is valuing Premier’s equity at about 496 million pounds ($704 million), based on Reuters data.
A bid issued on 12 March was rejected, and, most recently one presented 14 March, sitting at an estimated $700m, was also turned down.
Premier Foods said it had a “strong future” as an independent business and has laid the foundations to expand significantly and boost shareholder value.
The latest possible offer represented a premium of about 90 percent to Premier stock’s close on Wednesday. It said there was no certainty it would make a firm offer and that it would make a further announcement in due course.
David Beever, c hairman of Premier Foods, said McCormick’s bid attempted to capture the value in the business ” that rightfully belongs to Premier’s shareholders”.
At the same time, Premier said it signed a cooperation deal with Japan’s Nissin Foods Holdings, the maker of instant noodles, that could see Premier sell Nissin’s products in Britain and Nissin sell Premier’s overseas.
McCormick has until April 20 to make a firm offer as per British takeover rules.
“This is an exceptional opportunity for us to gain a major strategic partner which understands our business and supports our growth ambitions”, said Gavin Darby, Premier’s CEO, in a statement.
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Mr Kipling cakes firm Premier Foods revealed it has snubbed a takeover approach from an American suitor and announced a tie-up with noodle-giant Nissin Foods. The deal will give Premier access to Nissin’s products to distribute them in the United Kingdom under either Nissin’s or Premier’s brands, such as Batchelors, while speeding up the distribution of its products around the world.
