24th Mar 2016 08:18
LONDON (Alliance News) - Premier Foods PLC on Thursday said Nissin Foods Holdings Co Ltd will buy a 17% stake in Premier from an existing shareholder for an undisclosed amount.
Based on Premier's current market capitalisation, the stake would be worth around GBP68.8 million.
The news comes after Premier Foods, which makes Bisto gravy and Mr Kipling cakes, said on Wednesday it has entered into a cooperation agreement with Nissin, which invented instant noodles in 1958.
Under the agreement, which is conditional on Premier no longer being subject to an offer period under the Takeover Code, Premier will get access to distribute Nissin products in the UK, and will see its products distribution by Nissin globally.
Premier also said on Wednesday it was considering entering into a relationship agreement with Nissin which would include giving the Japanese company the right to appoint a non-executive director to Premier's board. Nissin had confirmed to Premier it did not intend to make an offer for the company in the next six months.
"We welcome Nissin as a new long-term shareholder in our business. By gaining a strategic investor who understands and supports our growth ambitions, we have an exceptional opportunity to deliver shareholder value. Based on the conditional cooperation agreement we announced yesterday, we very much look forward to working with Nissin to develop ways our two businesses can co-operate to drive growth," Chairman David Beever said in a statement on Thursday.
This also comes after Premier Foods on Wednesday revealed it had rejected two takeover approaches from US spices and herbs manufacturer McCormick & Co, saying they undervalued the business.
Shares in Premier Foods were trading down 6.9% at 50.07 pence on Thursday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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