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RNS Number : 0772T
McCormick and Company, Inc.
23 March 2016
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.
FOR IMMEDIATE RELEASE
McCormick & Company confirms possible offer for Premier
Foods plc
SPARKS, MD March, 23 2016 - 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 12 February 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 14 March 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 a transaction on a recommended basis. The
Revised Proposal was rejected by Premier Foods yesterday, 22 March
2016.
The Revised Proposal reflects a substantial premium to all
relevant recent Premier Foods share price metrics, in particular a
premium of:
-- 90 per cent. to the pre-announcement Premier Foods share price of 31.5 pence; and
-- 55 per cent. to the 12 month volume weighted average Premier
Foods share price of 38.6 pence for the 12 month period ending 22
March 2016.
In addition, the implied exit multiple of 10.3x pro forma 2015
EBITDA compares favourably 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 20 April 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 joyce_brooks@mccormick.com)
McCormick Corporate Communications
Lori Robinson (410-527-6004 or lori_robinson@mccormick.com)
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(TM).
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.
March 23, 2016 09:24 ET (13:24 GMT)
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 GBP144.9m for the 52 weeks ended 4
April 2015 has been sourced from Premier Food's 2015 annual
report.
-- The net debt of GBP585.3m and the post-tax future cash flows
of the agreed pension deficit contribution payment schedule of
GBP390m 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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March 23, 2016 09:24 ET (13:24 GMT)
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