McCormick tables third bid for Premier Foods

Undated handout photo issued by Premier Foods of their logo. PRESS ASSOCIATION Photo. Issue date: We

Undated handout photo issued by Premier Foods of their logo. PRESS ASSOCIATION Photo. Issue date: Wednesday February 20, 2013. Photo credit should read: Premier Foods/PA Wire - Credit: PA

The heat has been turned up in the bid battle for Mr Kipling cakes firm Premier Foods after Schwartz spice owner McCormick & Company tabled its third approach for the business, worth £537 million.

The US spice and herbs giant put forward a proposal worth 65p a share for Premier, which also owns Oxo and Sharwood's.

Premier rejected McCormick's first offer of 52p in cash per share, and a second at 60p in cash per share, saying they 'significantly' undervalued its future growth.

The latest twist in the takeover saga comes as Premier Foods revealed last week that Japanese noodle giant Nissin Foods had bought a 17.27% stake in the business at 63p per share.

But the US firm said its latest sweetened proposal 'should be well received by Premier Foods' shareholders, employees, pensioners, creditors, and other stakeholders'.

It added: 'McCormick continues to believe that, with its 127-year heritage, it would be an outstanding custodian for the Premier Foods brands.'

It said its deal would be attractive whether Nissin continued to co-operate with Premier or not.

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The US firm urged the Premier board to open talks and 'now engage fully' with it over its takeover offer.

In a statement, McCormick said its current 65p in cash per share offer gives Premier an enterprise value, which includes debts and pension obligations, of £1.5 billion.

Last March Premier Foods, led by chief executive Gavin Darby, completed a £1.1 billion refinancing package to tackle the debt mountain which brought the firm to the brink of collapse a few years earlier.

Premier Foods was thrust into the spotlight in December 2014 after writing to suppliers to ask for cash support, or face losing business with the food group.

Prices across the food industry have been falling for more than a year, driven down by competition from discount supermarkets Aldi and Lidl.

Maryland-based McCormick has annual sales of 4.3 billion US dollars (£3 billion), and owns the Schwartz seasoning brand in the UK, as well as its classic McCormick herbs and spices in the US.

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) and an operating profit of 216 million US dollars (£152 million). Its products include Cup Noodles and Top Ramen.

It also emerged this week that St Albans-based Premier told Nissin of the bid from McCormick before notifying its own shareholders.

A spokesman for Premier reportedly said: 'Nissin was aware of the approach from McCormick because it was essential before committing to the commercial collaboration. Premier Foods, believing the offer did not value the company, moved to pursue more value-creating opportunities'

Nissin went on to buy its stake in the UK food firm from private equity group Warburg Pincus.

Premier Foods also issued a clarification statement which said that Mr Darby was not aware of any discussions McCormick may have held with Warburg Pincus, adding that it was open to the buyout group to sell its holding in Premier to any group it chose.