Bidding battle hots up for Premier Foods
The move followed Premier’s announcement that it would welcome offer from any source, after last week rejecting a bid from McCormick because it “significantly undervalued” the company.
The US firm stressed its revised offer was conditional upon “the prompt and full engagement” from Premier Foods.
It also highlighted the new offer depended upon a review of Premier’s pension liability, current trading and material contracts.
The comments follow an earlier complaint from McCormick that Premier Foods’s board had denied the manufacturer’s shareholders the opportunity to consider the US firm’s “highly attractive cash offer”.
‘Unwilling to engage constructively’
It said: “Despite McCormick’s efforts to enter into a meaningful dialogue with Premier Foods on several occasions, the board of Premier Foods has been unwilling to engage constructively with McCormick.”
The improved offer would be well received by all concerned, predicted the US firm.
It said in a statement: “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’s current capital structure cannot deliver with or without the proposed co-operation with Nissin Foods.”
Last week Premier revealed the Japanese instant noodle manufacturer had acquired a 17.27% shareholding in Premier Foods. The deal offered benefits for both parties, said Premier Foods’s chairman David Beever who welcomed Nissin Foods as “a long-term shareholder”.
The Premier boss added: “By gaining a strategic investor who understands and supports our growth ambitions, we have an exceptional opportunity to drive shareholder value,” said Beever.
Five specific benefits
The partnership with Nissin was expected to help develop Premier’s ambition of growing international sales in the key markets of Asia and elsewhere. Beever claimed five specific benefits would arise from the partnership with Nissin.
Meanwhile, last weekend two big Premier shareholders had criticised the manufacturer’s management for not giving sufficient consideration to the earlier bid from McCormick.
Key shareholders Standard Life and Paulson & Co – together thought to hold about 14% of Premier’s shares – were both said to be unhappy with Premier’s handling of the offer from McCormick.
McCormick pitched its first offer for Premier shares at a price of 52p a share last month. It then upped the offer to 60p a share on March 14 before its latest bid of 65p a share.
Nissin – which operated in 19 countries – was credited with inventing instant noodles nearly 60 year ago.
