Premier Foods, maker of British brands including Mr Kipling cakes and Oxo, yesterday rebuffed a third improved takeover proposal from McCormick – but agreed for the first time to disclose key financial information to the American suitor.
After the US spices business made a takeover proposal worth 65p a share, or £573 million in total, Premier said it was “prepared for meetings to take place to discuss value drivers, a review of material pensions documentation, current trading and material contracts”.
It said it was doing so “to establish whether McCormick will increase its offer price to a recommendable level”, and that any bid the Americans made would be “deliverable”.
The British group had rejected McCormick’s first and second cash offers, worth 52p and 60p respectively, saying they significantly undervalued its growth prospects.
St Albans-based Premier, which has come under fire from some institutional investors for the way it has handled McCormick’s previously denied requests for “constructive” talks, repeated that charge yesterday. McCormick yesterday urged the target’s board to open talks and “engage fully” with its latest offer proposal. “McCormick continues to believe that, with its 127-year heritage, it would be an outstanding custodian for the Premier Foods brands,” it said.
It also emerged yesterday that Japanese noodle-making giant Nissin had upped its stake in Premier Foods to 19.9 per cent on Tuesday, paying 63p a share. Nissin had acquired a 17.3 per cent holding from private equity group Warburg Pincus last week – the day after the second McCormick offer was rejected.
That earlier turn of events led to Edinburgh-based Standard Life Investments, with a 7 per cent holding in Premier, criticising the target company.
David Cumming, head of equities at SLI, said at the time that Premier’s apparently favourable stance regarding Nissin did “not reflect well… on the board’s objectivity” and urged further talks with McCormick in the hope of attracting a higher bid.
Nissin’s collaboration with Premier could see the Japanese company’s products distributed in the UK and Premier capitalising on its new partner’s international distribution network.
A McCormick spokesman said yesterday that the company had until 20 April to make a firm offer for Premier or walk away under City takeover rules.