Premier Foods today (18 November) confirmed that it has rejected an approach from rival UK food group United Biscuits for its Mr Kipling brand.
Speaking to just-food, a spokesperson for the company said that Premier received a GBP250m (US$370.2m) offer for the brand.
However, Premier chief executive Robert Schofield rebuffed the bid from the private equity-owned UB.
With GBP1.7bn of debt, Premier is coming under increasing pressure to improve its balance sheet.
In a trading update released this morning, Premier said that it has secured a new lending deal with its backers while discussions with its lenders on reducing debt levels remain ongoing. However, the company also announced that it would suspend dividend payments until debt is reduced.
“The board has determined not to pay the 2008 interim dividend and will consider the future dividend policy as part of the long term capital structure review but it is the board’s intention to resume dividend payments when debt levels permit,” Premier chairman David Kappler said.
It is understood that UB is now mulling the option of approaching banks or shareholders with an offer directly. The company was unavailable for comment as just-food went to press.