A prominent Scottish fund manager has rapped the board of Premier Foods over its handling of takeover approaches from US herbs and spices group McCormick & Co and the subsequent purchase of a 17.3 per cent stake in the company by Nissin Foods of Japan.
The criticism from Standard Life Investments (SLI) came the day after Premier Foods, whose products include Mr Kipling cakes, rejected a second offer from McCormick & Co.
David Cumming, head of equities at SLI, the asset management arm of insurer Standard Life, which has a 7 per cent holding in Premier, said he wanted the company to talk again with McCormick to try for a higher bid.
Cumming said: “We note with some dismay the timing of Nissin’s acquisition of a stake in Premier Foods. In our view, this does not reflect well on the Premier Foods board’s objectivity and commitment regarding its engagement with McCormick and consequently its desire to pursue maximum value for shareholders.
“Although we believe the 60 pence bid indicated by McCormick is too low, we remain open to a bid at a higher level. We expect the Premier Foods board, on behalf of its shareholders, to engage with McCormick and pursue this option to the full.”
McCormick’s latest rejected bid is worth £490 million – or 60p a share – which Premier said significantly undervalued the business. Premier said yesterday it would consider any improved offer on its merits.
David Beever, Premier’s chairman, said that Nissin was “a strategic investor who understands and supports our growth ambitions” and would help “deliver shareholder value”.