Newspaper article The Evening Standard (London, England)

Premier Foods Makes a Move to Ease the Jitters

Newspaper article The Evening Standard (London, England)

Premier Foods Makes a Move to Ease the Jitters

Article excerpt

Byline: SARAH MARKS

MR KIPLING baker Premier Foods was forced to make an official statementtoday to soothe rattled investors after rumours of an emergency rights issuespooked the market.

Premier told the City it was "not contemplating a rights issue" after itsshares plummeted by nearly 20%. At one stage Premier was changing hands at just87p after opening at 120p as rumours of breached banking covenants and deeply adiscounted price issue triggered panic selling.

But a terse statement assuring the market it was "not in breach of ourfinancial covenants as at December 2007", pushed Premier back up to 108p.

Although Premier continued "we do not expect to be in breach on an ongoingbasis", investors will have to wait until 4 March for more details. Premierconfirmed it will announce full-year results and a final dividend as scheduled.

What is clear is that the home of Hovis is under intense pressure from soaringcommodity prices for grain and milk and competition from rivals and supermarketown brands which are crippling its attempts to pass the costs on to theconsumer. The shares have virtually halved since the start of the year,fuelling talk of trouble within..

After yesterday's pounding, major shares opened strongly but slipped back withthe FTSE 100 up 6.4 at 5730.5.

Losers included Rolls- Royce , down 14 3 / 4 p at 416 1 / 4 p, andGlaxoSmithKline, 33p lower at 1045p. The miners fared better as consolidationhopes were reinvigorated by reports that Xstrata's majority shareholderGlencore has appointed Citigroup. An offer of between [pounds sterling]42 and [pounds sterling]46 a share couldsee a takeover value of almost [pounds sterling]45 billion.

Miners were prominent on the Footsie leader board with Kazakhmys up 52p at1240p and Antofagasta 25p ahead at 705p. Vedanta Resources was also in vogue,62p higher at 1884p.

A clear winner from the turmoil in global equities is the London StockExchange, up 67p at 1749p. Recent figures show a huge surge in trades inJanuary including four days with a million trades apiece, while 22 January wasthe busiest day on record with 14 million trades executed. …

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