The battle to take control of Premier Foods is heating up, with its American suitor McCormick making a higher takeover bid that values the company behind Mr Kipling cakes and Ambrosia custard at £1.5bn.
McCormick, known for Schwartz dried spices and sauces, raised its proposed terms to 65p a share in cash from earlier bids of 60p and 52p, which were both rejected by Premier as too low. It said this revised offer “should be well received by Premier Foods’ shareholders, employees, pensioners, creditors and other stakeholders”.
A week ago, Premier announced a cooperation agreement with Japan’s Nissin, which invented instant noodles in 1958. Within 24 hours, Nissin became the British company’s biggest shareholder when it bought the 17.3% stake held by US private equity firm Warburg Pincus for 63p a share.
McCormick, based in Maryland, said on Wednesday: “McCormick continues to believe 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 with or without the proposed cooperation with Nissin Foods.”
Premier’s board has come under fire from two major shareholders over the way it has been handling the takeover approach. Edinburgh-based Standard Life and US hedge fund Paulson & Co have urged the company to talk to McCormick. In response, Premier said last week that it would give “careful consideration” to any improved proposal from McCormick or any other bidder.
Under UK takeover rules, McCormick has to table a firm offer by 5pm on 20 April.
By Julia Kollewe
Source: The Guardian
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