Shares in Premier Foods, the company behind beloved British brands like Bisto and Mr Kipling, took a sharp dive after Cadbury's parent company, Mondelez International, quashed rumours of a potential takeover.
The St Albans-based firm saw its stock price tumble by as much as 26% following Mondelez's statement that it "does not intend to make an offer for Premier Foods". This comes after weeks of speculation that had driven Premier Foods' shares up by nearly 40%.
Market Reaction
Investors reacted swiftly to the news, with Premier Foods' shares dropping to 37.25p after reaching a high of 50.25p earlier in the week. The dramatic swing highlights how much the market had priced in expectations of a bid from the American confectionery giant.
Company Background
Premier Foods, which also owns Oxo and Sharwood's, has been working to reduce its substantial debt burden in recent years. The company rejected a takeover approach from US spice maker McCormick in 2016, a decision that some shareholders later questioned as the firm's financial challenges persisted.
Analysts suggest that without the prospect of a takeover, Premier Foods will need to demonstrate it can grow organically to regain investor confidence. The company's next financial update will be closely watched for signs of progress in its turnaround strategy.
