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Premier up 10pc on takeover talk

Shares in Premier Foods, which owns the Hovis bread and Bisto gravy brands, rose to their highest in four months in London trading after a report it may invite takeover offers.

Premier Foods, Penneys owner Associated British Foods and family-owned Warburtons control close to 90pc of the UK bread market.

Shares in Premier Foods climbed as much as 10pc in trading yesterday, after weekend media reports that private-equity firms have been approached by the company about a possible £1.2bn (€1.5bn) deal for the business.

The idea has been floated as a "fallback position" to Premier Foods's current restructuring strategy.

Analysts said a private equity bid could trump offers from trade rivals.

Premier Foods has been selling assets to cut debt. It completed the sale of a spreads and jellies unit including Hartley's jam and Frank Cooper marmalade for £200m.

Martin Deboo, an analyst at Investec, said asset sales are not fixing the company's debt problems. "Despite £275m of disposals in the last six months, Premier's leverage ratio hasn't changed much."

Shares rose as much as 9.5p to 101p yesterday, the highest price since June 7. Share are up 71pc since January. (Bloomberg)

Irish Independent