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| Branston firm's £1.2bn Oxo buyout | Branston firm's £1.2bn Oxo buyout |
| (10 minutes later) | |
| Premier Foods, the owner of brands such as Branston sauces and Ambrosia Creamed Rice, has agreed to buy rival RHM for £1.2bn to become the top UK food firm. | Premier Foods, the owner of brands such as Branston sauces and Ambrosia Creamed Rice, has agreed to buy rival RHM for £1.2bn to become the top UK food firm. |
| RHM's board has approved the deal that will bring together names such as Hovis bread, Mr Kipling cakes and Oxo gravy. | RHM's board has approved the deal that will bring together names such as Hovis bread, Mr Kipling cakes and Oxo gravy. |
| The merged company will have annual sales of £2.6bn, with 93% of those revenues coming from the UK. | The merged company will have annual sales of £2.6bn, with 93% of those revenues coming from the UK. |
| Premier will pay a mixture of cash and new shares in a deal that values RHM stock 30% higher than its Friday close. | Premier will pay a mixture of cash and new shares in a deal that values RHM stock 30% higher than its Friday close. |
| Shares soar | Shares soar |
| News of the deal sent shares in both companies up sharply. | News of the deal sent shares in both companies up sharply. |
| RHM shares soared 35% in early trading while Premier's shares rose 8%. | RHM shares soared 35% in early trading while Premier's shares rose 8%. |
| The management might be too keen to do a deal after failing to get United Biscuits Clive Black, Shore Capital See Premier Foods shares | The management might be too keen to do a deal after failing to get United Biscuits Clive Black, Shore Capital See Premier Foods shares |
| Premier said it would pay one new share and 83.2 pence in cash for each RHM share, working out at about 352.45p for each RHM share. | Premier said it would pay one new share and 83.2 pence in cash for each RHM share, working out at about 352.45p for each RHM share. |
| The purchase still needs to be approved by shareholders of both companies. | The purchase still needs to be approved by shareholders of both companies. |
| "This acquisition provides a unique opportunity to combine two of the UK's leading food companies," Premier chairman David Kappler said. | "This acquisition provides a unique opportunity to combine two of the UK's leading food companies," Premier chairman David Kappler said. |
| Earlier this year, Premier said that it was looking at acquisition targets and formed part of a group that tried, and failed, to buy United Biscuits. | Earlier this year, Premier said that it was looking at acquisition targets and formed part of a group that tried, and failed, to buy United Biscuits. |
| Too greedy? | Too greedy? |
| Some analysts questioned the price that Premier was paying for RHM. | Some analysts questioned the price that Premier was paying for RHM. |
| "The management might be too keen to do a deal after failing to get United Biscuits," said Clive Black, an analyst at Shore Capital. | "The management might be too keen to do a deal after failing to get United Biscuits," said Clive Black, an analyst at Shore Capital. |
| RHM has seen demand for some of its products decline, hit by a slowdown in the market as a whole. | |
| It previously said that it expected turnover from its cakes business to drop by 12% in the six months to the end of October. |