Premier Foods said it will hold meetings with its suitor McCormick & Co after the US spice maker raised its takeover proposal for the second time.
Premier Foods, the maker of Mr Kipling cakes and Bisto gravy, said today the revised offer of 65 pence per share still undervalued it.
But it said it would discuss "value drivers, a review of material pensions documentation, current trading and material contracts to establish whether McCormick will increase its offer price to a recommendable level".
Earlier McCormick & Co called on the UK company's board to engage in talks that could lead to a deal.
The new proposal of 65 pence per share aims to break a stalemate that arose last week after Premier refused McCormick's prior offers of 52 and 60 pence per share.
Instead it agreed to an international co-operation deal with Japanese noodle maker Nissin, sparking criticism from some Premier investors.
At 65 pence, McCormick is valuing Premier's equity at £537m.
Including debt and future pension liabilities, McCormick says it represents an enterprise value of £1.51 billion.
The latest proposal is a little over double the stock's closing price on March 23, when the approach was made public.
Premier's shares have been depressed by a large debt load and pension liabilities left over from an acquisition spree.
In addition to the deal with Nissin whereby the Japanese company will sell Premier's products overseas, Nissin bought 17.3% of the company from private equity firm Warburg Pincus for 63 pence per share, becoming its largest shareholder.
This led some other major shareholders including Paulson & Co and Standard Life Investments, to criticise the objectivity of Premier's board.
McCormick said its revised proposal was based on "prompt and full engagement" by Premier's board and subject to limited confirmatory due diligence that comprises a review of pensions documentation, current trading and material contracts.
McCormick, known for its spices and Lawry's seasonings, has until April 20 to make a firm offer under British takeover rules.
