Now Premier agrees to talks after US predator raises offer

MR Kipling maker Premier Foods has finally agreed to hold talks with US suitor McCormick & Co after it sweetened its bid to £537m.

Premier Foods said McCormick’s third offer undervalues the company but it is now willing to hold talks if McCormick submits an ‘improved proposal’.

Premier Foods admitted earlier this month that it had received two previous offers from McCormick in February of 52p and 60p a share. It rejected these offers and announced an agreement with Nissin for a partnership to sell the noodle maker’s products in the UK.

The following day Nissin announced it had purchased a 17.3pc stake in the Bisto and Bird’s custard maker. It had paid 63p a share, becoming its largest shareholder.

McCormick’s latest bid is set at 65p a share – valuing the entire company – including debt, equity and its pension liabilities at around £1.5bn.

Premier, which also owns Oxo and Sharwood’s food brands, has been under pressure from major shareholders for not engaging fully with McCormick.

Shareholders Paulson & Co and Standard Life Investments criticised the board for not engaging with the company.

The US spice and sauce maker has until April 20 to make a firm offer.

Analysts at broker Shore Capital urged Premier shareholders to accept the revised proposal, which is more than double Premier’s closing price on March 23, before the approach was made public.

‘We see 65p as a good compromise price, allowing Premier’s management to highlight the extra value it has extracted from McCormick, whilst also offering shareholders the opportunity of a cash exit today at a reasonably full … valuation,’ they said. Mary- land-based McCormick, which traces its roots back to 1889, said it would be an ‘outstanding custodian’ for Premier Foods brands and 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 cooperation with Nissin Foods.’

It is not the first time McCormick has been shopping in Britain.

McCormick first came to the UK in 1961. In 1984 it bought UK-listed Paterson Jenks to get its hands on the Schwartz spice business.

Premier Foods shares rose 4.4pc or 2.5p to 59p.