US spice processor McCormick & Co. has made a third approach for Premier Foods Plc, raising its proposal to about £537 million ($775 million) for the British owner of Mr. Kipling cakes.
McCormick said it’s ready to offer 65 pence in cash per share if Premier’s management would agree. The UK company already rejected bids of 52 pence and 60 pence, and last week formed a partnership with Japanese company Nissin Foods Holding Co., which is buying a 17 per cent stake. Premier shares rose as much as 9.7 per cent in London.
"We see 65 pence as a good compromise price, allowing Premier’s management to highlight the extra value it has extracted from McCormick, while also offering shareholders the opportunity of a cash exit today at a reasonably full Ebitda valuation," Darren Shirley, an analyst with Shore Capital, said by e-mail.
Premier’s well-known stable of gravy brands, cooking sauces and dessert mixes would complement McCormick’s Schwartz brand in the UK McCormick urged the British company to engage and work out a recommended offer and said its latest proposal values Premier at £1.5 billion ($2.2 billion), including debt.
Premier shares reached 62 pence, their highest intraday level since June 2014, giving the company a market capitalization of more than £500 million.
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