LONDON (dpa-AFX) - Premier Foods Plc. (PFD.L) Wednesday said it has rejected a revised approach from McCormick & Co., Inc. (MKC) and announced cooperation agreement with Nissin Foods Holdings Co., Ltd. The company further raised its sales growth guidance for the medium term to 2-4% from 1-2% expected earlier. The Board's expectations of trading profit for full year remain unchanged. Shares of Premier Foods were gaining around 47 percent in the morning trading in London.
The company said it has identified a number of new strategic initiatives to help accelerate growth across its three Business Units of Grocery, Sweet Treats and International. These initiatives are expected to incur initial upfront investment of 2 million pounds to 4 million pounds in the full year 2017.
Premier Foods said its Board had rejected an earlier unsolicited, non-binding and highly conditional approach from McCormick on February 12, regarding a possible offer at an indicative price of 52 pence in cash per Premier share.
The company confirmed now that its Board has unanimously decided to reject a subsequent approach on March 14 with a revised possible offer at an indicative price of 60 pence in cash per Premier share, as it significantly undervalues the Company and its prospects.
The company said McCormick's proposal represents an insufficient premium to Premier's enterprise value.
The Board sees a strong future for an independent Premier and believes that the foundations have been laid for significant growth and shareholder value creation.
Premier expects to increase significantly its investment in consumer marketing to approximately £36 million in the 2015/16 financial year from approximately £25 million in the 2013/14 financial year.
Further, the company has now agreed to enter into a cooperation agreement with instant noodles maker Nissin Foods Holdings Co., Ltd.
In London, Premier shares were trading at 46.25 pence, up 46.83 percent.
Copyright RTT News/dpa-AFX