McCormick & Co, Inc. (MKC) - Statement re Possible Offer for Premier Foods
plc

RNS Number : 2470T
McCormick and Company, Inc.
24 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 on its possible offer for Premier Foods plc

 

SPARKS, MD 24 March 2016 - McCormick & Company, Incorporated (NYSE: MKC)
("McCormick"), a global leader in flavor, notes the recent announcements
regarding Premier Foods plc ("Premier Foods") and Nissin Foods Holdings Co.
McCormick is disappointed that the Board of Premier Foods is conducting itself
in a way that denies Premier Foods' shareholders the opportunity to consider
McCormick's highly attractive cash offer.

 

Despite McCormick's efforts to enter into a meaningful dialogue with Premier
Foods on several occasions, the Board of Premier Foods has been unwilling to
engage constructively with McCormick
. McCormick notes recent media comments
and wishes to clarify that there has only been one face-to-face meeting with
Premier Foods' Chairman, David Beever on 12 February 2016. There has been no
dialogue at any stage with any other members of the management team or with
Premier Foods' advisers, who had not been identified to McCormick until
Premier Foods' announcement on 23 March 2016. No material information has been
shared by Premier Foods beyond confirmation that: management expectations with
respect to trading profit and net debt remained unchanged from Premier Foods'
most recent market update; and no change of control in any material licence
agreements would be triggered by the completion of the transaction.

 

McCormick is willing to proceed with limited confirmatory due diligence that
comprises only: a review of material pensions documentation, current trading
and material contracts. In relation to pensions documentation, which is not in
the public domain, McCormick believes this is a reasonable request given the
significance of Premier Foods' pension position. McCormick believes that its
offer is highly deliverable due to its limited pre-conditions.

 

McCormick's proposal of 60 pence per Premier Foods share values Premier Foods
at an Enterprise Value of approximately £1.5bn and represents a 90 per cent.
premium to the pre-announcement Premier Foods share price of 31.5 pence and an
implied exit multiple of 10.3x pro forma 2015 EBITDA. McCormick is, however,
willing to consider increasing its latest offer if justified following its
confirmatory due diligence. McCormick believes that an all cash offer should
be well received by Premier Foods' shareholders, employees, pensioners,
creditors, and other stakeholders.  McCormick believes that, with its 127 year
heritage, it would be an outstanding custodian for the Premier Foods brands,
and, with the strength of its balance sheet, can provide benefits for Premier
Foods, its pensioners, creditors and other stakeholders, which Premier Foods'
current capital structure cannot deliver. Accordingly, McCormick urges the
Premier Foods shareholders to encourage the Board of Premier Foods to engage
fully with McCormick.

 

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; (ii) amend the terms of its proposed
offer (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 its proposed offer,
or (d) following the announcement by Premier Foods of a whitewash transaction
pursuant to the Code; and (iii) waive any pre-condition to the making of an
offer.

 

There is no certainty that a firm offer will be made even if the
pre-conditions referred to above are satisfied or waived 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)

 

Bell Pottinger

Gavin Davis (+44-7910-104-660)

Liz Morley (+44-7990-003-314)

 

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 29
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