Wall Street hedge fund manager John Paulson has attacked the management of Premier Foods for refusing to engage in discussions over a takeover from US spice company McCormick as the battle over the future of the Kipling Cakes maker intensifies.
The FTSE 250 company has rejected two bids from McCormick, the latter pitched at 60 pence a share, and has said it’s prepared to engage in discussions should there be a higher offer.
Paulson & Co, which says it owns more than 7 per cent of Premier’s shares, said in a statement on Thursday afternoon that “we communicated to the Chairman yesterday our belief that after receiving the approach from McCormick & Co., the company should fully engage with McCormick.”
The criticism of Premier Foods echoes that made earlier on Thursday by Standard Life, which owns a similar amount of the shares. Premier Food’s future is complicated by the board’s decision to instead pursue a “co-operation agreement” with Nissin Foods, the Japanese maker of instant noodles.
Nissin strengthened its hand this week by acquiring a 17 per cent stake in Premier Foods from Warburg Pincus for 63p a share. Mr Paulson, who is best known for making billions betting against the US sub-prime mortgage market, said “the fact that the company’s longstanding and largest shareholder sold all their shares at 63p, shows that the 60p offer from McCormick should be worthy of engagement.”
Premier Foods has described McCormick’s bid as a “highly conditional” one that “significantly undervalued” the company. Premier Foods closed down 3.3 per cent at 52p.