Premier Foods abandons Ambrosia sale, blaming business climate
Premier Foods has abandoned plans to sell off its Ambrosia brand, it told investors today, blaming the current business climate.
Talks began with potential buyers in November, and since the new year Premier Foods had narrowed interest down to a “small group” of possible bidders, but nobody has made an acceptable offer.
Read more: Premier Foods boss is set to depart after shareholders' summer revolt
The firm has now called talks to a halt, saying: “The board has concluded that in the present business climate the process will not result in a satisfactory financial outcome. As a result, these discussions have now concluded.”
The maker of Bisto and Oxo stock cubes was trying to sell off Ambrosia to slash its debt, and the latest news comes as a blow following poor results last month.Former chief executive Gavin Darby stepped down at the end of January after a shareholder revolt over summer that saw 41 per cent of investors vote against his re-appointment.
Darby was blamed for failing to hike the share price above the 65p per share offer received from US rival McCormick, which Premier Foods rejected.
Today's news saw Premier’s share price fall four per cent to 35.7p, a further knock after the Mr Kipling maker saw logistics problems eat into its cake sales in the last three months of 2018.
Read more: Premier Foods logistics issues leave bitter aftertaste for sales
Darby said last month: “We faced into two sets of challenges in the quarter – lower international sales and our logistics programme, which as expected, affected cake sales volumes early in the quarter.
“As we look to the fourth quarter, we expect to see a good performance from branded Sweet Treats and we have a good innovation plan lined up.”