Premier Foods shares down after McCormick abandons takeover attempt
Mr Kipling cakes firm Premier Foods saw shares plunge by more than a quarter after Schwartz spice US owner McCormick & Company gave up on its takeover pursuit.
McCormick walked away from the takeover tussle after having three bid approaches worth up to £537 million rejected by Premier, saying it could not pay a price that would be accepted by the Premier board.
Shares in Premier - which also owns Oxo, Bisto and Sharwood's - slumped 28% as investors were left disappointed.
McCormick said it had, "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".
"Accordingly, McCormick has withdrawn its proposal to acquire Premier Foods," it added.
Premier bosses insisted they see a "strong future for an independent Premier Foods".
St Albans-based Premier found itself at the centre of a takeover saga, rejecting several offers from McCormick while agreeing a "co-operation agreement" with Japanese noodle giant Nissin Foods, which has built up a 19.9% stake in Premier.
But some investors were left disgruntled after it emerged Premier told Nissin of the bid from McCormick before notifying the rest of its shareholders, while they were also angered by the board's dismissal of earlier offers.
Premier rejected McCormick's first offer of 52p in cash per share, a second at 60p and a third made at the end of March worth 65p a share, saying they undervalued Premier and its future growth prospects.
However, after the third approach, the Premier board agreed to open talks for the first time with McCormick.
Premier said it appreciated McCormick's "open and collaborative spirit" in discussions.
Shares in Premier had almost doubled since McCormick's takeover interest first emerged.
Premier said it believed its "longer-term prospects will be enhanced by the co-operation agreement it has signed with Nissin Foods".
The agreement c ould see Nissin's products distributed in the UK and Premier taking advantage of the Japanese firm's international distribution network.
Nissin has also agreed not to attempt to buy Premier Foods for six months, unless another group makes a firm bid for the UK food business.
The Japanese firm bought its stake in the UK food firm from private equity group Warburg Pincus, upping the holding from 17.3% to 19.9% at the end of March.
Nissin Foods - which invented the first instant noodles in 1958 - trades across 19 countries and has annual revenues of 3.8 billion US dollars (£ 2.6 billion).
Its products include Cup Noodles and Top Ramen.