Premier Foods shares plunge as US suitor scraps takeover bid

Shares in Premier Foods plunged 29% as US suitor McCormick scrapped takeover talks with the jilted Mr Kipling cake-maker.

McCormick said it walked away from the Ambrosia custard-to-Bisto gravy producer after a due diligence concluded it “would not be able to propose a price that would be recommended by the board of Premier Foods”, or deliver appropriate returns for McCormick shareholders.

Premier’s shares dropped more than 16p to 40.4p. The update came two weeks after McCormick, known for its Schwartz spices, made a third offer for the group of 65p a share, valuing Premier at £537 million.

Premier, which has teamed up with the Great British Bake Off’s Paul Hollywood on a range of products, believed the latest offer undervalued the business. But it agreed to take a seat at the negotiation table.

Failed talks are expected to put pressure on Premier’s boss Gavin Darby to deliver more growth for investors. Investors criticised Premier last month over a new alliance with noodle maker Nissin, which agreed to buy a 17.3% stake in the firm. Some wanted Premier Foods to opt for negotiations with McCormick instead.

Premier said its board “sees a strong future” as an independent company.