Premier Foods has come under fire from a leading shareholder after McCormick walked away from negotiations to buy the Mr Kipling producer.

Paulson & Co, US hedge fund and Premier’s second biggest shareholder, said it was “Extremely disappointing that the board could not recommend an offer at a 106 percent premium to the pre-announcement price.”

Yesterday, US spice brand McCormick said: “It would not be able to propose a price that would be recommended by the board of Premier Foods” after examining Premier’s books. It had previously made three offers for the company at 52p, 60p and 65p a share respectively.

Paulson & Co, along with another major shareholder Standard Life, had previously lobbied Premier to engage in talks with McCormick or other bidders. Standard Life also criticised the timing of Premier’s cooperation agreement with Japanese instant noodle firm Nissin, saying it questioned the company’s “objectivity and commitment” regarding engagement with McCormick.

Shareholders may yet have an impact yet on proceedings, with an industry banker not involved in the situation telling the Daily Mail: “I don’t think this is dead yet. If I were a gambler, I’d think the shareholders would have some pretty tough discussions with Premier Foods’ management.”

Premier’s share price plummeted over 25% in the wake of the announcement and this morning had not recovered, down to 42.87p per share at 9.06 this morning from 57.13p the night before McCormick’s announcement.