Premier Foods tanks as McCormick walks away from bid

Shares in Mr Kipling and Oxo owner Premier Foods tumbled on Wednesday as US-based McCormick & Co. said it did not intend to make an offer for the company.

Having completed its due diligence review of Premier Foods and after careful consideration, the company 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”.

At the end of March, Premier agreed to open talks with McCormick after rejecting the company’s third takeover offer of 65p a share, or £537m.

Meanwhile, Japan’s Nissin Food lifted its stake in Premier to 19.9%, having purchased a 17.3% holding at 63p a share.

Premier said on Wednesday that it sees a strong future for as an independent company and believes the foundations have been laid for significant growth and shareholder value creation.

“The board also considers that the company's longer-term prospects will be enhanced by the cooperation agreement it has signed with Nissin Foods Holdings Co., Ltd. which will expand Premier Foods' range of growth opportunities.”

Premier said it plans to accelerate its growth by executing its recently-announced new strategic initiatives to leverage the company's existing capabilities, infrastructure and brand equity so as to expand into new formats, channels and markets.

At 0835 BST, Premier shares were down 28% to 40.96p.