Image: Premier Foods Image: Premier Foods

British food manufacturer Premier Foods has rejected a takeover approach from US herbs and spices firm McCormick.

Premier, which owns brands such as Mr Kipling, Bisto Homepride, OXO and Lloyd Grossman, said it rejected the approach because it "substantially undervalued the company and its prospects".

McCormick offered 52p per share for the FTSE SmallCap Index listed company, which is around 21p more than Premier's share price at the time of the approach.

Premier's share price jumped more than 40% to around 44-45p per share following the news.

Premier's chairman, David Beever, said: "McCormick's proposal represents an attempt to capture the upside value embedded in Premier's business that rightfully belongs to Premier's shareholders.

"The proposal fails to recognise the value of Premier's performance to date and prospects for the future, including the strategic plans we have to accelerate growth."