UK – British food manufacturer has dropped plans to offload its Ambrosia brand which includes rice pudding and custards, which it had planned to sell for a consideration of about US$129 million.
The company which makes Mr Kipling cakes has blamed difficult business climate as well as its huge debt which it had planned to service using the proceeds from the divestment.
The planned sale was in line with strategic business review to focus on key brands such as Batchelors.
The embattled Chief Executive, Gavin Darby who stepped down from the company last month had put the Ambrosia brand on sale following pressure from activist investor Oasis to restructure the business.
He had said that the disposal would help focus resources ‘on areas of the business which have the best potential for growth through accelerated investment in consumer marketing and high return capital projects’.
“A number of parties expressed interest and, since the new year the company has been engaged in detailed discussions with a small group of potential buyers,” Premier said.
“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.”
Last month, the company elevated finance chief, Alastair Murray to acting chief executive officer after former boss Gavin Darby was ousted by activist investor, Oasis Management.
Hedge fund Oasis had long sought Mr Darby’s removal, blaming him for poor volumes and sales for the past disappointing financial years.
In July, he was almost ousted by investors when 41% of shareholders voted against him, despite having received a 99.5% endorsement in 2017.
His misfortunes surfaced in 2016 when US spice maker McCormick walked away from a proposed US$693.53 million (£537 million) takeover, which hastened a 27% drop in Premier shares.
The company which also makes Oxo-cubes had said its third-quarter revenue fell 2.2%, on lower sales at its lower margin non-branded Sweet Treats unit.