Premier Foods shares sold like hot cakes as the company fended off an American encroachment.
The owner of Mr Kipling and other “exceedingly good” brands, Premier Foods was approached by the American based McCormick & Co with an offer in February, but was unanimously turned down by the board of directors.
According to Chairman David Beever, the offer “failed to recognise the value of Premier’s performance to date and prospects for the future” and “significantly undervalued the business”.
As a deterrence to the firm bid McCormick & Co could very well still make, Premier Foods announced a “co-operation” deal with the Japanese Nissin Foods, the inventor of instant noodles.
Although Nissin stated that it has no plans to make its own takeover offer for its new partner, the company could eventually build up a stake of up to 15% and also place a non-executive director on Premier Food’s board.
Under the direction of Chief Executive Gavin Darby, Premier foods doubled its rate of new product launches and has managed to erase £315m in debt. Following its rebuttal of McCormick & Co, company share prices skyrocketed 71%.