After British food company Premier Foods plc rejected McCormick & Co.'s $700 million takeover bid, the Sparks-based spice maker said Thursday it would consider raising the offer if it can review Premier's pension obligations.

McCormick has about a month to decide whether to proceed with what would be its largest acquisition after Premier, the maker of cooking sauces, seasonings and cake mixes in Britain, rejected the cash offer as insufficient.


"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," McCormick said in a statement Thursday.

Premier reiterated Thursday that McCormick's March 14 bid of 60 pence per share "significantly undervalues the company and its prospects. ... However, should McCormick, or any other bona fide potential offeror, come forward with an improved proposal that better reflects the board's assessment of the company's underlying value over the longer term, the board would give such offer careful consideration."

McCormick had first offered 52 pence a share for Premier in February before raising its bid to 60 pence, which it said represented a 90 percent premium to the pre-announcement Premier Foods price of 31.5 pence per share.

After surging more than 70 percent Wednesday, shares in Premier slipped 3 percent Thursday to close at 52 pence, or about 73 cents a share.

Earlier Thursday, Premier had announced that Japanese instant noodle maker Nissin Foods Holdings Co. Ltd. agreed to purchase a roughly 17 percent stake in Premier from an existing shareholder and said "the board notes that the relevant acquisition price was agreed to be 63 pence per Premier share."

Nissin was expected to take a stake in Premier, which said Wednesday it would cooperate formally with Nissin to share products, distribution and know-how. Nissin had agreed to not bid to buy its English partner for at least six months.

Premier's board has been "unwilling to engage constructively with McCormick," despite the company's efforts to enter into talks, McCormick said, adding that it has had only one in-person meeting with Premier Chairman David Beever, on Feb. 12.

"There has been no dialogue at any stage with any other members of the management team or with Premier Foods' advisers," McCormick said.

McCormick said it would be willing to pursue limited due diligence that would include a review of pensions documentation — which is not public — current trading and material contracts.

"McCormick is ... willing to consider increasing its latest offer if justified following its confirmatory due diligence," the company said. "McCormick believes that an all cash offer should be well received by Premier Foods' shareholders, employees, pensioners, creditors, and other stakeholders."

McCormick's stock price gained 49 cents Thursday to close at $96.33 a share.

The spice company is urging Premier's shareholders to encourage its board to enter into talks with McCormick. Under British law, McCormick has until April 20 to announce whether it intends to pursue its bid for Premier.

Already, major Premier shareholders are criticizing the board and calling on it to engage with McCormick, including Edinburgh, Scotland-based Standard Life Investments and New York-based Paulson & Co., each of which owns about 7 percent of the British company through their investment funds.

"The board has created an environment where they appear to be favoring Nissin Foods, which paid a significant premium to one shareholder, to the detriment of all other shareholders who were not offered any premium, and also to the detriment of other bidders who could be discouraged by Nissin Foods' 17.3 percent stake," Paulson said in a statement attributed to Orkun Kilic, a senior vice president at Paulson Europe in London.


David Cumming, Standard Life's head of equities, expressed dismay with Nissin's acquisition of a stake in Premier Foods.

"In our view, this does not reflect well on the Premier Foods Board's objectivity and commitment regarding its engagement with McCormick and consequently its desire to pursue maximum value for shareholders," Cumming said. "Although we believe the 60 pence bid indicated by McCormick is too low, we remain open to a bid at a higher level. We expect the Premier Foods Board, on behalf of its shareholders, to engage with McCormick and pursue this option to the full."