Japanese food producer Nissin Foods is aiming to acquire British food manufacturer Premier Foods PLC in a takeover deal. Nissin already made its first move by buying a 17.3 percent stake in the company for 63 pence per share last week, or 90 million pounds ($127 million) in total.

The takeover approach deal made Nissin the largest stakeholder in the British company. The percentage of stake owned by the Japanese company, more than 15 percent, also gave it the right to appoint a non-executive director to be on Premier Foods' board.

Premier Foods had recently rejected the similar approach from U.S. spices and herbs manufacturer McCormick & Company. The American company offered 60 pence a share in the company, totaling 1.5 billion pounds ($2.1 billion). However, the offer was rejected, followed by disappointments from Premier Foods' shareholder.

Following the rejection of the offer made by McCormick, Premier Foods made a statement saying that it had undervalued the company's growth prospects and capabilities. Some shareholders questioned the company's objectivity with the decision and have been urging Premier Foods' board to have talks with McCormick, as reported by Reuters.

According to The Wall Street Journal, the company said it would consider and evaluate any improved takeover proposal made by McCormick, or by any other party. The company stated, "Should McCormick, or any other bona fide potential offeror, come forward with an improved proposal that better reflects the board's assessment of the company's underlying value over the longer term, the board would give such offer careful consideration and evaluate its merits."

On the other hand, Nissin is considered as a strategic investor by Premier Foods' board. As the company's chairman David Beever put it in a statement, "By gaining a strategic investor who understands and supports our growth ambitions, we have an exceptional opportunity to deliver shareholder value." Even though Nissin is now the Premier Foods' largest stakeholder, the company must agree not to make a takeover bid for Premier for at least six months, as noted by Hungry Forever.

Premier Foods was established in 1975, and it owns many popular brands including Mr Kipling, Ambrosia, Homepride, and Bisto. Nissin Foods was popular in Japan and worldwide for its noodle products. The company was established in 1948 and has produced various products of noodles.

Nissin is entering the takeover bidding battle to acquire Premier Foods, in competition with American company McCormick which has the same aim. After buying 17.3 percent of the company's stake, Nissin is now Premier Foods' largest stakeholder and is approaching to takeover the whole company.