Spice and herb seller McCormick, Sparks, Md., said April 13 (today) that it's walking away from its earlier offer to buy British food maker Premier Foods, following a due-diligence review. McCormick reportedly made three offer attempts for Premier in recent weeks.
Last month, Premier rejected McCormick's most recent offer to buy the company for about $764 million. Following the third approach, Premier agreed to meet with McCormick to discuss the offer and further review the documentation and stated that it had made "constructive" progress.
PR Newswire reports that after careful consideration, McCormick concluded it would not be able to propose a price that would be recommended by the Premier Foods board, while also delivering appropriate returns for McCormick shareholders.
Accordingly, McCormick has withdrawn its proposal to acquire Premier Foods. Known for its spice packs with bright red labels, the Sparks, Md., company also sells Zatarain's rice mixes and Stubb's barbecue sauce. Premier's brands include OXO stock cubes, Bisto, Sharwood's and Mr. Kipling packaged cakes.
Premier's board indicated that it "saw a strong future for an independent Premier Foods." Shares of Premier Foods PLC dropped more than 25 percent on the London Stock Exchange. McCormick & Co. shares were unchanged before the U.S. stock market opened.