Spice giant McCormick abandons $2.1-bn takeover bid for UK's Premier Foods
14 April 2016
McCormick Foods, the world's largest spice maker, has abandoned its $2.1-billion bid for British food company Premier Foods after refusing to sweeten its offer.
McCormick said that it had "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"Accordingly, McCormick has withdrawn its proposal to acquire Premier Foods."
Premier Food's stock price plunged today by 30-per cent on the news. The company's shares had nearly doubled after McCormick tabled its takeover offer three weeks ago.
McCormick had in February offered 52 pence a share, which was rejected by Premier Food's saying that it undervalues the company. Later last month McCormick raised its offer to 65 pence a share.
But Japanese noodle maker Nissin Foods last month said that it would buy a 17.27-per cent stake in Premier Foods, upsetting McCormick's takeover plans.
Founded in 1889, Maryland-based McCormick manufactures, markets and distributes spices, seasonings, specialty foods and flavourings for the entire food industry - retail outlets, food manufacturers and food service businesses.
The company, which has grown through a series of acquisitions, expanded its presence in India by forming its third joint venture with Kohinoor Foods Ltd to market and sell the latter's basmati rice and food products in India.
Hertfordshire-based Premier owns many well-known brands, including Mr Kipling, Ambrosia, Angel Delight, Homepride cooking sauces, Sharwood's, Loyd Grossman sauses, Oxo, Bisto, and Batchelors.
It also produces cakes under the Cadbury's name, using the brand under licence.
Premier was once one of the Britain's biggest food companies, but became loaded with debt due to expansion.