24th Mar 2016 15:10
LONDON (Alliance News) - McCormick & Co Inc, the US spices and flavourings producer, on Thursday said it is willing to consider increasing its offer for Premier Foods PLC, the London-listed maker of Bisto gravy and Mr Kipling cakes.
In a statement, McCormick said it wants to review material pensions documentation, current trading and material contracts to help it decide whether to make a new, higher bid.
McCormick said it could increase its offer to above the 60.00 pence per share bid previously rejected by Premier Foods "if justified following its confirmatory due diligence".
"McCormick believes that, with its 127 year heritage, it would be an outstanding custodian for the Premier Foods brands, and, with the strength of its balance sheet, can provide benefits for Premier Foods, its pensioners, creditors and other stakeholders, which Premier Foods' current capital structure cannot deliver," the US spices and flavourings producer said.
The would-be acquirer urged shareholders in Premier Foods to "encourage" the target's board to "engage fully" with McCormick.
McCormick said that Premier Foods has been "unwilling to engage constructively".
Earlier Thursday, Premier Foods said it is open to considering a higher takeover offer from McCormick, following criticism from a major shareholder over its decision to work with Japanese noodle maker Nissin Food Co Ltd while refusing to engage with McCormick.
Standard Life Investments, the asset management arm of blue-chip life insurer Standard Life, which holds a 7.0% stake in Premier Foods, said it noted the timing of Nissin's acquisition of a stake in Premier Foods "with some dismay".
"In our view, this does not reflect well on the Premier Foods board?s objectivity and commitment regarding its engagement with McCormick and consequently its desire to pursue maximum value for shareholders," said David Cumming, head of equities at Standard Life Investments.
"Although we believe the 60p bid indicated by McCormick is too low, we remain open to a bid at a higher level. We expect the Premier Foods board, on behalf of its shareholders, to engage with McCormick and pursue this option to the full," Cumming added.
Shares in Premier Foods were up 1.5% at 54.54 pence on Thursday afternoon.
By Samuel Agini; [email protected]; @samuelagini
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