Premier Foods shares plummet as McCormick drops bid
Shares in Premier Foods have plummeted after US firm McCormick said it would not be making a takeover bid for the Mr Kipling cake maker.
McCormick said it had concluded it would not be able to make a bid acceptable to Premier Foods.
Premier Food's share price dived 30% on the news. The shares had nearly doubled since news of the takeover approach emerged three weeks ago.
Premier's brands also include Ambrosia rice pudding and Oxo stock cubes.
McCormick is chiefly known for its Schwartz spices and Lawry's seasonings.
The US firm had an initial offer of 52p a share rejected in February, and ultimately raised its offer for Premier to 65p a share on 30 March.
In a statement, McCormick said it had "completed its due diligence review of Premier Foods" which was conducted "in an open and collaborative spirit".
But it added: "McCormick has, after careful consideration, 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.
"Accordingly, McCormick has withdrawn its proposal to acquire Premier Foods."
In response, the UK company said it saw "a strong future for an independent Premier Foods".
"The board also considers that the company's longer-term prospects will be enhanced by the Co-operation agreement it has signed with Nissin Foods Holdings."
Last month, Japanese noodle maker Nissin Foods agreed to buy a 17.27% stake in Premier Foods.
Nissin, which Premier described as a "long-term shareholder", is expected to take a seat on the Premier board.
The co-operation deal with Nissin allows Premier to distribute Nissin's products in the UK, while making its own products more widely available in overseas markets.
Premier was once one of the UK's biggest food companies, but came unstuck when it expanded too fast, loading itself with debt.
It has since sold off its Hovis bread business to the US-based Gores group, rebuilt its £20m production line at its Mr Kipling bakery in Barnsley and pushed through a £1.1bn refinancing package, which included a £353m rights issue.