McCormick & Company Confirms Possible Offer for Premier Foods plc

SPARKS, Md., March 23, 2016 /PRNewswire/ -- McCormick & Company, Incorporated (NYSE: MKC) ("McCormick"), a global leader in flavor, notes the recent announcement by Premier Foods plc ("Premier Foods") and confirms that it has approached the Board of Premier Foods regarding a possible all cash offer for Premier Foods of 60 pence per Premier Foods share.

Background

On February 12, 2016, McCormick made a detailed proposal to acquire the entire issued share capital of Premier Foods for 52 pence per Premier Foods share. This proposal was rejected by the Board of Premier Foods. On March 14, 2016, McCormick made a revised proposal for a possible all cash offer of 60 pence per Premier Foods share (the "Revised Proposal"). The Revised Proposal was made on the basis that it would lead to prompt and full engagement from Premier Foods, including access to limited confirmatory due diligence, to agree to a transaction on a recommended basis. The Revised Proposal was rejected by Premier Foods yesterday, March 22, 2016.

The Revised Proposal reflects a substantial premium to all relevant recent Premier Foods share price metrics, in particular a premium of:

• 90 percent to the pre-announcement Premier Foods share price of 31.5 pence; and
• 55 percent to the 12 month volume weighted average Premier Foods share price of 38.6 pence for the 12 month period ending March 22, 2016.

In addition, the implied exit multiple of 10.3x pro forma 2015 EBITDA compares favorably with recent significant UK food transactions.

McCormick believes that an all cash offer at this level should be well received by Premier Foods' shareholders, employees, pensioners and other stakeholders, and would provide Premier Foods' shareholders with an attractive premium combined with the certainty of cash value now.

Strategic rationale for the Revised Proposal

An acquisition of Premier Foods, one of the leading branded food companies in the United Kingdom, would be consistent with McCormick's long-term strategy and has the potential to create value for McCormick shareholders. Premier Foods offers seasonings, gravy and stock cubes, cooking and pasta sauces, dessert mixes and sweet treats under brand names including Oxo, Bisto, Sharwood's and Mr. Kipling's. Strategic considerations for such an acquisition would include the following:  

• Add a portfolio of iconic, household-name brands which complement McCormick's product range and expertise;
• Increase significantly McCormick's presence in a large grocery retail market;
• Leverage McCormick's innovation and marketing capabilities and strong balance sheet to improve on the execution of Premier Foods' strategy;
• Grow Premier Foods' presence in international markets through McCormick's global scale; and
• Realize synergies to enable further investment in Premier Foods' iconic British brands to drive growth.

McCormick is a market leader in the global herbs & spice category and has a 30 year track record in the UK across the food industry, through its Schwartz brand in retail and foodservice and through its business to business relationships with quick service restaurants and other consumer food companies. McCormick's management team has a track record of successfully executing acquisition opportunities in adjacent categories in developed and emerging markets, and increasing the performance of the brands that it acquires. The Board of McCormick expects that an acquisition of Premier Foods would be consistent with McCormick's long term strategy. Any transaction would be financed from McCormick's existing resources and new debt facilities.

Code considerations

In accordance with Rule 2.6(a) of the Code, McCormick is required, by not later than 5.00 p.m. on April 20, 2016, to either announce a firm intention to make an offer for Premier Foods in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code.

Pursuant to Rule 2.5 of the Code, McCormick reserves the right to: (i) vary the form and/or mix of the consideration; and (ii) amend the terms of the Revised Proposal (including making the offer at a lower value) (a) with the recommendation or consent of the Board of Premier Foods, (b) if Premier Foods announces, declares or pays any dividend or any other distribution to shareholders, in which case McCormick reserves the right to make an equivalent reduction in its offer price, (c) if a third party announces a firm intention to make an offer for Premier Foods at a lower price than the Revised Proposal, or (d) following the announcement by Premier Foods of a whitewash transaction pursuant to the Code.

There is no certainty that a firm offer will be made and a further announcement will be made in due course.

For information contact:

McCormick Investor Relations
Joyce Brooks (410-771-7244 or [email protected])

McCormick Corporate Communications
Lori Robinson (410-527-6004 or [email protected])

Goldman Sachs
Will Bousquette (+1-212-902-1000)
Mark Sorrell (+44-20-7774-1000)

Rothschild
Akeel Sachak (+44-20-7280-5000)
Lauren Cowan (+44-20-7280-5000)

About McCormick

McCormick & Company, Incorporated is a global leader in flavor. With $4.3 billion in annual sales, the company manufactures, markets and distributes spices, seasoning mixes, condiments and other flavorful products to the entire food industry – retail outlets, food manufacturers and foodservice businesses. Every day, no matter where or what you eat, you can enjoy food flavored by McCormick. McCormick Brings Passion to Flavor™.

For more information, visit www.mccormickcorporation.com.

Important notices

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise.

The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

Goldman Sachs International, which is authorized by the Prudential Regulation Authority and regulated in the United Kingdom by the Prudential Regulation Authority and the Financial Conduct Authority is acting as financial adviser exclusively for McCormick and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and will not be responsible to anyone other than McCormick for providing the protections afforded to clients of Goldman Sachs International, nor for providing advice in relation to any matter referred to herein.

N M Rothschild & Sons Limited, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for McCormick and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than McCormick for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Sources and bases

• The stated share prices of Premier Foods are based on the closing middle-market price provided by Bloomberg.
• The pre-announcement price per Premier Foods share is taken as at 22 March 2016.
• The average closing price per Premier Foods share over the twelve month period ended 22 March 2016 is for the period from 23 March 2015 up to and including 22 March 2016 (only trading days are included in the average).
• The pro forma EBITDA of £144.9m for the 52 weeks ended 4 April 2015 has been sourced from Premier Food's 2015 annual report.
• The net debt of £585.3m and the post-tax future cash flows of the agreed pension deficit contribution payment schedule of £390m were sourced from Premier Foods interim results published on 10 November 2015.
• The equity value of the Revised Proposal assumes 826,567,063 Premier Foods shares in issue and the dilutive impact of a further 35,571,126 Premier Foods shares.

Publication on website

A copy of this announcement will be made available at www.mccormickcorporation.com no later than 12:00 noon (London time) on 24 March 2016 (being the business day following the date of this announcement) in accordance with Rule 26.1(a) of the Code. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE.

SOURCE McCormick & Company, Incorporated

Related Links

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