FCA Probes Mr Kipling Owner Share Trades

The City watchdog is probing suspicious share trades ahead of wild fluctuations in the share price of Premier Foods (LSE: PFD.L - news) , the owner of Mr Kipling and Oxo.

Sky News has learnt that the Financial Conduct Authority (FCA) wrote to the company and its City advisers in recent days to inform them that it was seeking to review trading activity in its stock.

The FCA's focus is understood to be on a frenetic period this year in which Premier Foods was the subject of a possible takeover bid from McCormick's, an American rival.

The specific source of the FCA's concern was unclear on Thursday evening.

Other City firms are also understood to have been contacted by the FCA.

Premier Foods announced on 23 March that it had received an unsolicited approach from McCormick's at an indicative price of 52p-a-share, and that it had been rejected as "significantly undervaluing" the British company.

The news sent Premier (NasdaqGS: PINC - news) 's shares soaring, with a co-operation agreement with Japan's Nissin Foods Holdings being announced at the same time to the irritation of some large investors.

Nissin subsequently acquired a 17.3% stake in Premier, which also owns Angel Delight and Sharwood's, while McCormick's returned with a higher proposal worth 65p-a-share.

The US-based food group did not table a formal offer, however, and announced on 13 April that it was abandoning its interest.

Premier's shares moved sharply on a number of occasions during this period.

A person close to the FCA said it was possible that its initial enquiries may not lead to a formal investigation.

However, the news that it is examining trading in Premier's shares is notable because it comes on the same day that a former Deutsche Bank (LSE: 0H7D.L - news) broker received the longest-ever sentence for insider trading.

Martyn Dodgson was arrested more than five years ago following an investigation led by the FCA's predecessor body, the Financial Services Authority.

Premier Foods and the FCA declined to comment.