Premier Foods plc has turned down the latest proposed takeover offer from McCormick & Co. – but the UK group said it was prepared to meet and provide its US suitor with some due diligence.
The Mr Kipling cakes and Ambrosia custard owner insisted McCormick’s 65 pence-a-share indicative bid – announced earlier today – “continues to undervalue Premier and its prospects”. The latest proposal was up from the 60p-a-share approach McCormick made on 14 March and which Premier rebuffed last week.
McCormick, the owner of brands including Schwartz, Ducros and Lawry’s, said this morning its latest proposal was subject to Premier providing information on “material pensions documentation, current trading and material contracts”.
Premier’s response to the new approach included an offer for its board to meet McCormick and to provide the information its suitor wanted. “The board is, however, prepared for meetings to take place in order to discuss value drivers, a review of material pensions documentation, current trading and material contracts, and so to establish whether McCormick will increase its offer price to a recommendable level. It will also be important for McCormick to demonstrate to the board that any revised proposal is deliverable,” Premier said.
It added: “The board has informed McCormick that it will be expected to provide an improved proposal following these meetings. Generating shareholder value remains the board’s key focus.”
Premier revealed McCormick’s interest in the company last Wednesday. Alongside that announcement, Premier said it had struck a “co-operation agreement” with Japan’s Nissin Foods Holdings that would involve the companies working in areas such as innovation and distribution.
On Thursday, Nissin announced it had acquired the 17.27% stake held in Premier by US private-equity firm Warburg Pincus.
The rejection of McCormick’s first two proposals, the agreement with Nissin and the Japanese group’s investment in Premier led to criticism of the UK group from some of its shareholders, prompting the Bisto gravy maker on Thursday to insist it was open to “improved proposals”.
This morning, just hours after McCormick announced its latest proposed offer, it emerged Nissin had increased its stake in Premier to 19.9%.
Shares in Premier were up 7.17% at 60.55p at 13:26 BST.
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