Shares in Premier Foods have rocketed by 65 per cent today after the Mr Kipling and Bisto gravy owner confirmed it has rejected a second £496m takeover approach from US rival McCormick, saying the offer significantly undervalued the company.
The food company said it was was first approached on 12 February regarding a possible cash offer of 52 p per share, which is turned down. McCormick then tabled a second offer of 60p per share on 14 March, which was also rejected on the basis that it undervalued the business and its prospects.
David Beever, chairman of Premier, said: “McCormick’s proposal represents an attempt to capture the upside value embedded in Premier’s business that rightfully belongs to Premier’s shareholders. The proposal fails to recognise the value of Premier’s performance to date and prospects for the future, including the strategic plans we have to accelerate growth."
McCormick, known for its spice brands such as Schwartz, has until 5pm on 20 April to make a firm offer for Premier Foods or walk away.
Premier Foods, which also owns Homepride and Lloyd Grossman sauces, announced that has agreed to enter a "cooperation agreement" with Nissin Foods, the Japanese maker of instant noodles.
The deal would see Premier sell Nissin's products in the UK while also allowing it to use Nissin's international scale to sell more products in key overseas markets.
The company said it is also considering entering a relationship whereby Nissin is given a seat on the board, if it holds a stake of 15 per cent or more in Premier Foods.
However the tie-up would prevent Nissin from making a takeover offer for at least six months and is also dependent on no third party making a firm offer for Premier.
Gavin Darby, Premier's chief executive, said: "This is an exceptional opportunity for us to gain a major strategic partner which understands our business and supports our growth ambitions.