Premier Foods' share price soared more than 9.3 per cent this morning after US food giant McCormick has upped its bid following the Mr Kipling parent' rejection of its first two offers.
McCormick has raised its offer to 65p per share, valuing the firm at £1.5bn, up from the 60p per share overture it made last week. It first offered 52p per share back in February.
But so far, Premier Foods has rebuffed all proposals saying they significantly undervalue the business and its prospects.
With its third attempt to woo the board on the table, McCormick said it called for directors to "now engage fully with McCormick to agree a recommended offer, which will offer all shareholders the opportunity of a cash exit at a full valuation of the company".
The new deal represents a 106 per cent premium to Premier Foods' share price prior to any bid, when it stood at 31.5p. It carries an implied exit multiple of 10.6x to last financial year's EBITDA.
"McCormick believes that this revised offer should be well received by Premier Foods' shareholders, employees, pensioners, creditors, and other stakeholders," the bidder said.
"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 co-operation with Nissin Foods.
McCormick now has until 20 April to announce a firm intention to make an offer for Premier Foods.