US Spice Firm Ditches Mister Kipling Maker Proposal

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Source:   —  April 13, 2016, at 12:43 PM

McCormick & Co says it cannot afford to pay what Premier Foods wants for a takeover after its latest £1. 5bn proposal was rejected.

US Spice Firm Ditches Mister Kipling Maker Proposal

Schwartz spice firm McCormick & Co has abandoned its £1.5bn pursuit of Britain's Premier Foods after deciding it couldn't meet the asking price for gobbling up the Mister Kipling maker.

The US-based firm pulled out after three earlier proposals to Premier were rejected as too low.

Shares in the British company, which had doubled since news of US-based McCormick’s interest emerged latest year, tumbled twenty-five percent after McCormick said it was pulling out.

Premier – whose brands also comprise Bisto, Homepride, Oxo and Sharwood's, will presently be free to focus on accelerating its own growth plans, including one involving cooperation with Japanese noodle maker Nissin Foods.

Nissin has built up a 19.9 percent stake in Premier.

McCormick'south takeover approaches were repeatedly rejected as undervaluing the business – though the latest attempt two weeks ago had seen Premier indicate that it was "prepared for meetings to get place" to look if the proposal could be improved.

The latest proposal had valued Premier'south shares at £537m, while including debt and future pension liabilities it represented an undertaking cost of £1.5bn for the business.

Presently McCormick'south has said it'd "concluded that it'd not be able to propose a price that'd be recommended by the board of Premier Foods while also delivering appropriate returns for McCormick shareholders".

"Accordingly, McCormick has withdrawn its proposal to acquire Premier Foods," the firm added.

Premier said it saw a "powerful future for an independent Premier Foods".

It said it believed its "longer-term prospects would be enhanced by the co-operation agreement it's signed with Nissin Foods".

The agreement could look Nissin'south products distributed in the UK and Premier taking advantage of the Japanese firm'south international distribution network.

Nissin has also agreed not to attempt to purchase Premier Foods for six months, unless another grouping makes a firm tender for the UK food business.

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