Shares in Premier Foods rose 3.25p to close on 128.75p yesterday amid speculation that the food manufacturer was attracting the interest of Kraft Foods.

Rumours in the City suggested Kraft Foods was mulling a bid for Premier Foods, although there were no clues about the level of offer or timing, according to the Independent.

Analysts were sceptical of the deal. “To me, the takeover potential of Premier Foods just does not look good,” said Clive Black, an analyst at Shore Capital. “But, it would be arrogant to dismiss it straight away - stranger things have happened.”