Premier Foods rejects new offer from McCormick & Company but agrees to talks

Sharwood's sauces maker Premier Foods is the target of a takeover bid by US-based McCormick & Compan

Sharwood's sauces maker Premier Foods is the target of a takeover bid by US-based McCormick & Company, which already owns the Schwartz spices business in the UK. - Credit: Archant

Mr Kipling cakes group Premier Foods has rejected a third takeover offer from Schwartz spices owner McCormick & Company – but has agreed for the first time to enter talks with its United States-based suitor.

The latest offer from McCormick, worth 65p per share and valuing Premier at £537million, follows previous proposals of 52p and 60p per shares.

It also comes a week after Premier announced a “co-operation agreement” with Japanese noodle giant Nissin Foods after it acquired a 17.27% stake in the UK business at 63p per share.

Premier, which also owns brands including Oxo, Bisto and Sharwood’s, said the new approach from McCormick continued to undervalue the group and its prospects but – following a call from McCormick to “engage fully” and questions from some other Premier shareholders about its preference for a tie-up with Nissin – the board has agreed to enter talks to “establish whether McCormick will increase its offer price to a recommendable level”.

Tabling its improved offer, McCormick said: “McCormick continues to believe that, with its 127-year heritage, it would be an outstanding custodian for the Premier Foods brands”, adding that such a deal would be attractive whether or not Nissin continued to co-operate with Premier.

Last March Premier Foods, led by chief executive Gavin Darby, completed a £1.1billion refinancing package to tackle the debt mountain which brought the firm to the brink of collapse a few years earlier.

Maryland-based McCormick has annual sales of 4.3billion US dollars (£3bn) and, besides the Schwartz seasoning brand in the UK, owns the flagship McCormick herbs and spices business in the US.

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Nissin Foods, which invented the first instant noodles in 1958 and owns brands including Cup Noodles and Top Ramen, trades across 19 countries and has annual revenues of 3.8bn US dollars (£2.6bn).