Thursday 29 September 2016

Shareholders in Mr Kipling owner exceedingly worried over deal with Japanese giant

Eshe Nelson and Anooja Debnath

Published 26/03/2016 | 02:30

UK’s Premier Foods produces household names including Mr Kipling. Photo: Bloomberg
UK’s Premier Foods produces household names including Mr Kipling. Photo: Bloomberg

Two major shareholders in the UK food group behind brands including Mr Kipling and Bisto have urged it to hold talks with US suitor McCormick, after the British company formed an alliance with Japanese instant noodle maker Nissin Foods.

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Premier Foods has rebuffed two approaches from US spices maker McCormick, saying its proposal of 60 pence per share, or £1.5bn (€1.9bn), including debt and pension liabilities, "significantly undervalued" it.

The British firm instead agreed a co-operation deal with Japan's Nissin that on Thursday also saw the Asian company become Premier's largest shareholder. Nissin bought the 17.3pc stake from private equity firm Warburg Pincus for 63 pence per share, or £90m.

However, two other large shareholders - Paulson & Co and Standard Life Investments - have now criticised Premier's board, questioning its objectivity and commitment to shareholder value.

Paulson owns more than 7pc of Premier.

It said that the board appeared to be favouring Nissin to the detriment of other shareholders.

"The company should fully engage with McCormick," Orkun Kilic of Paulson Europe said in a statement, adding McCormick, was better able to safeguard future pension obligations than Premier. (Reuters)

Irish Independent

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