McCormick Makes Fresh Bid for Premier Foods

The fresh bid follows previous bids of 52p (74 cents) a share and 60p (86 cents) a share, both of which have been rejected by Premier Foods who said they “significantly undervalued” the company.

 

Following the failed bids, Premier Foods struck a deal with Japanese noodle maker Nissin Foods, which has acquired a 17.27 stake in Premier Foods.

 

The deal with Nissin allows Premier Foods improved distribution channels across global markets.

 

The fresh bid comes from McCormick comes as the US company reports its financial results for the three months to February 29, which showed that its net income had increased from $70.5 million to $93.4 million on the year.

 

Revenues were up two percent to just over $1 billion.

 

Its sales lift was helped by new products and expanded distribution, particularly across Europe, Middle East and Africa, as well as a good showing in China.

 

Income was helped by successful cost cutting program and McCormick said it plans to cut a further $400 million of costs from the business over the next four years.

 

Lawrence E. Kurzius, president and chief executive said: "McCormick's first quarter results were a great start to fiscal year 2016.  Consumer demand for healthy flavor and high quality products is increasing globally and we are meeting this demand with a growing portfolio of on-trend products.”

 

“Each of our two segments achieved strong underlying sales increases driven by our growth strategy.  We are growing base business sales with brand marketing and are launching differentiated new products such as herb grinders and slow cooker sauces for our consumer segment and snack seasonings for industrial customers.”

 

“We had an incremental sales benefit from three acquisitions completed in 2015, and continued to expand the availability and footprint of our business through retail channels and with new industrial customers.”

 

“Led by our Comprehensive Continuous Improvement (CCI) program, we are on-track to deliver at least $95 million of cost savings in 2016 and recently announced a goal to reach $400 million of cost savings in the next four years.”
 
“Together with our strategies to drive sales growth, these cost savings are driving higher gross profit margin and in the first quarter, led to a double-digit increase in adjusted operating income on a constant currency basis.”