30th Mar 2016 06:26
LONDON (Alliance News) - US spices and flavourings group McCormick & Co Inc on Wednesday made an increased bid for UK food company Premier Foods PLC and has called on the company to engage with it over the offer.
McCormick offered 65.00 pence per share, valuing Premier Foods at GBP536.7 million. The stock closed Tuesday in London at 56.50p for GBP476.0 million market capitalisation.
The new offer comes after Premier Foods, the maker of Mr Kipling cakes and Bisto gravy, had rejected two previous bids from McCormick ahead of a key shareholder, Warburg Pincus, selling a 17% stake to Japanese noodle maker Nissin Foods Co Ltd instead.
Premier subsequently faced criticism from major shareholders over the timing of the sale of a stake to Nissin just after the rejection of McCormick's advances. The shareholders - including Standard Life Investments, the asset management arm of blue-chip life insurer Standard Life PLC and US hedge fund Paulson & Co - called on Premier's board to engage with McCormick on its offer, and Premier responded late last week, saying it would carefully consider an increased offer from McCormick.
McCormick on Wednesday called on Premier Foods to engage with the offer, arguing it provides shareholders with the opportunity of a cash exit from their holdings at a full valuation of the company.
Premier Foods also published a statement clarifying comments made by Chief Executive Gavin Darby to the Daily Telegraph.
Darby told the newspaper: "The Premier Foods board feel very confident that rejecting 60p was a good decision. Warburg Pincus took the opportunity of selling their shares and chose to sell their shares to Nissin Foods. Just as much as it could have been a deal between Warburg Pincus and McCormick & Co. I'm sure all three of them were involved."
Premier Foods said Darby "was not aware, nor could he have been" of any talks between McCormick and Warburg Pincus.
"He was simply seeking to make clear, in response to a question from the journalist, that it would have been open to any party, including McCormick, at any time to approach Warburg Pincus with a view to purchasing all or part of their shareholding," Premier said.
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Premier Foods