Owner of Mr Kipling set to be broken up
The owner of cake brand Mr Kipling is set to press ahead with a break-up of its group.
Premier Foods – whose subsidiary Knighton Foods makes powdered products such as Smash potato and Angel Delight at Knighton on the Shropshire-Staffordshire border, has now hired bankers to help manage the process.
In February, Premier launched a strategic review, bowing to pressure from investors Oasis and Paulson, who own more than 20 per cent of the group and had called for a radical shake-up.
Insiders believe that, while all options are on the table, including a sale, a break-up is now the most likely.
Premier is also behind custard brand Ambrosia, Batchelors soups, Bisto gravy and Oxo cubes.
Premier is worth about £300 million, but any break-up or sale would be complicated by its large-scale pension liabilities and £500 million debt pile.
In November chief executive Gavin Darby said he would stand down following criticism from Oasis.
The group had been critical of his strategy, in particular when he saw off of a 60p-per-share takeover bid from McCormick in 2016 – shares are currently worth about 35p.
Instead of tying up with McCormick, Premier in that year announced a collaboration agreement with Japan’s Nissin Foods.
Premier has also recently scrapped plans to sell off Ambrosia, blaming the current business climate, and last year abandoned the sale of Batchelors. Both could again be put up for sale as part of a break-up.
Premier said in February that Daniel Wosner and Orkun Kilic - from Oasis and Paulson respectively - will join the board as non-executive directors, along with Simon Bentley.
Chief financial officer Alastair Murray is acting as interim boss while the hunt for a permanent successor to Mr Darby continues.