McCormick & Co. abandoned plans to make a takeover bid for Premier Foods Plc, saying the UK company’s board wants too high a price.
McCormick finished a review of Premier’s finances with the cooperation of the company’s management, the Sparks, Maryland-based company said in a statement Wednesday. Premier had rejected three advances from McCormick since February before agreeing to talk to the suitor under pressure from shareholders.
"McCormick has, after careful consideration, concluded that it would not be able to propose a price that would be recommended by the board of Premier Foods while also delivering appropriate returns for McCormick shareholders," the company said. "Accordingly, McCormick has withdrawn its proposal to acquire Premier Foods."
The last takeover proposal valued Premier at 65 pence a share in cash, or £1.5 billion ($2.2 billion), including debt. McCormick has said it plans to extend the reach of Premier brands such as Mr. Kipling cakes and Bisto gravy internationally.
Premier fell 0.9 per cent to close at 57 pence Tuesday in London trading. The stock has surged from 31.50 pence on 22 March, the day before the company disclosed that McCormick had approached it about a deal.
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