Shares in Mr Kipling owner Premier Foods dropped 19% yesterday, after French broker Exane BNP Paribas put a negative valuation on the company and ratings agency Fitch downgraded its credit rating.

At close of trade on Wednesday, Britain’s biggest food manufacturer had a share price of 3.78p, after opening at 4.65p, and a market capitalisation of £90m.

In a bearish note on the company, Exane analyst Jeff Stent said Premier had few must-have assets, making an “equity escape route” unlikely, and was not likely to “trade its way out of its woes”. He gave the group a valuation of -5.4p a share and cut his share price target for Premier from 10p to 1p.

Meanwhile, Fitch downgraded Premier Foods’ long-term issuer default Rating (IDR) to ‘BB-’ from ‘BB’, and said its outlook was ‘negative’.