The UK’s Premier Foods—known for its Mr. Kipling cakes and Bistro gravy among other brands—has rejected two unsolicited takeover bids from McCormick & Co saying the US company’s proposals undervalue its growth prospects and is not in the best interest of shareholders.
McCormick valued Premier at 60 pence per share, about 496 million pounds or roughly $704 million, according to Reuters. Shares of Premier were trading at 54 pence per share as of 4:11 p.m. GMT Wednesday, up about 70 percent from the market close Tuesday. McCormick, known for its herbs and spices, said this offer should be attractive to Premier’s employees and shareholders, and is consistent with its mission to add iconic house-hold name brand products to its portfolio and increase its presence in the grocery retail market.
“McCormick’s proposal represents an attempt to capture the upside value embedded in Premier’s business that rightfully belongs to Premier’s shareholders,” David Beever, chairman of Premier. “The proposal fails to recognize the value of Premier’s performance to date and prospects for the future, including the strategic plans we have to accelerate growth.
McCormick has until April 20 under British law to make another offer for the company or announce its intentions to discontinue pursuit.
At the same time as this announcement, Premier says it has signed a deal with Japan’s instant noodle manufacturer Nissin Foods Holdings Co Ltd. that would allow Premier to distribute Nissin’s products in the UK and Nissin to do the same with Premier’s products in overseas markets.