Premier Foods, the owner of British food brands including Mr Kipling cakes and Oxo stock cubes, is exploring options as part of a regular review into maximizing shareholder value.
The review comes amid a flurry of activity in the packaged food sector in which Nestle is being pushed to change by an activist shareholder, Unilever is selling its margarines business and Reckitt Benckiser is selling its mustard business.
“In line with good corporate governance, the group regularly reviews options to deliver value for all its stakeholders,” the company said in a statement on Thursday. “These reviews are carried out in the ordinary course of business as part of the group’s standard planning cycle and also on ad hoc bases, and may involve external advisors.”
A spokesman for Premier Foods declined to elaborate, but the company’s statement was in response to a Wall Street Journal report that said Premier had hired Credit Suisse to review options that could include the sale of one or more brands, a merger with another food group or an outright sale.
Credit Suisse has been an adviser to the company for several years. A spokeswoman for the bank declined to comment.
Premier said last month it was changing its strategy to give equal focus to revenue growth, cost efficiencies and cash generation. It said on Thursday its board had made no changes to the new strategy.
Separately, Hong Kong-based shareholder Oasis Management, which has a representative on Premier’s board, said it had raised its stake in the company to 8.84 percent. Its plan is to reach 10 percent by June 2018.
Last year, Premier rejected a twice-improved 65 pence-per-share takeover bid from U.S. rival McCormick Foods , garnering criticism from major shareholders and leading to a steep drop in its share price.
The shares closed on Wednesday at 40 pence apiece.
The U.S. suitor’s offer valued Premier’s equity at $774 million at the time, but given the drop in the British currency since then, the same offer would be worth $698 million now. ($1 = 0.7698 pounds)
By Martinne Geller
Source: Reuters
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