Premier Foods Mulls Turnaround Options Ahead of Annual Vote

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Britain’s Premier Foods said on Wednesday it was identifying opportunities to speed up the company’s turnaround as it posted a rise in quarterly sales ahead of a crucial annual meeting that will decide the fate of under-fire CEO Gavin Darby.

Premier had held “exploratory discussions” with Japan’s Nissin Foods about selling its top-performing Batchelors soups brand but nothing materialized, Chairman Keith Hamill told reporters late Tuesday.

Top shareholders Oasis Management and Paulson & Co have repeatedly criticized the Mr Kipling cakes maker for its lagging share price and also blamed Darby for a failed takeover bid by U.S. spice maker McCormick & Company Inc two years ago.

Oasis recently called on the company to divest the Batchelors brand to improve its financial outlook and create funds for investment.

Hamill said the board looked at the possibility and Oasis was “highly enthusiastic” about it, but such a move was not acted upon.

Premier had earlier rejected the call, saying it would not sell one of its “jewels”.

The company said in its trading update on Wednesday that the Batchelors brand continued to “display excellent growth” and helped boost its quarterly sales 1.7 percent.

“Our biggest brand, Mr Kipling, led the charge with an excellent performance on the back of its recent brand relaunch with sales up 14 percent in the UK,” Darby said.

The company has been riding on the success of sales outside its home market and partnerships with its largest shareholder and Japanese noodle-maker Nissin and candy-maker Mondelez.

Sales at its international business rose 4 percent in the quarter and nearly 20 percent over the last two quarters, the company said.

“Q1 has delivered a further quarter of growth and the best sustained sequence since 2012,” Jefferies analysts said in a note.

Premier made no change to its full-year expectations and said it expects to make progress in the second half of the year. (Reporting by Martinne Geller Editing by Leslie Adler)

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