McCormick: on its Possible Offer for Premier Foods

Sparks / MD. (mcc) McCormick + Company Inc., a global leader in flavour, notes the recent announcements regarding Premier Foods PLC and Nissin Foods Holdings Company. McCormick is disappointed that the Board of Premier Foods is conducting itself in a way that denies Premier Foods’ shareholders the opportunity to consider McCormick’s highly attractive cash offer.

Despite McCormick’s efforts to enter into a meaningful dialogue with Premier Foods on several occasions, the Board of Premier Foods has been unwilling to engage constructively with McCormick. McCormick notes recent media comments and wishes to clarify that there has only been one face-to-face meeting with Premier Foods’ Chairman, David Beever on February 12, 2016. There has been no dialogue at any stage with any other members of the management team or with Premier Foods’ advisers, who had not been identified to McCormick until Premier Foods’ announcement on March 23, 2016. No material information has been shared by Premier Foods beyond confirmation that: management expectations with respect to trading profit and net debt remained unchanged from Premier Foods’ most recent market update; and no change of control in any material license agreements would be triggered by the completion of the transaction.

McCormick is willing to proceed with limited confirmatory due diligence that comprises only: a review of material pensions documentation, current trading and material contracts. In relation to pensions documentation, which is not in the public domain, McCormick believes this is a reasonable request given the significance of Premier Foods’ pension position. McCormick believes that its offer is highly deliverable due to its limited pre-conditions.

McCormick’s proposal of 60 Pence per Premier Foods share values Premier Foods at an Enterprise Value of approximately 1.5 billion GBP and represents a 90 percent premium to the pre-announcement Premier Foods share price of 31.5 Pence and an implied exit multiple of 10.3 times pro forma 2015 Ebitda. McCormick is, however, willing to consider increasing its latest offer if justified following its confirmatory due diligence. McCormick believes that an all cash offer should be well received by Premier Foods’ shareholders, employees, pensioners, creditors, and other stakeholders. McCormick believes that, with its 127 year heritage, it would be an outstanding custodian for the Premier Foods brands, and, with the strength of its balance sheet, can provide benefits for Premier Foods, its pensioners, creditors and other stakeholders, which Premier Foods’ current capital structure cannot deliver. Accordingly, McCormick urges the Premier Foods shareholders to encourage the Board of Premier Foods to engage fully with McCormick.


Related news: please see «Premier Foods rejects approach from McCormick and announces co-operation agreement with Nissin Foods» (in bakenet:eu dated on 2016-03-24) and other statements on premierfoods.co.uk.

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