Private-equity house Warburg Pincus has grabbed a 13% stake in Premier Foods after a fundraising exercise was shunned by some shareholders.

The maker of Hovis bread and Bisto gravy sold a 10% stake in itself to Warburg as part of attempts to rebuild a battered balance sheet and reduce its £1.7 billion debt mountain.

It also launched a £404 million share placing, paying staggering fees to investment banks of £76 million to underwrite the shares and extend loans.

Today it emerged that 66% of the new shares on offer were taken up by shareholders - a result in the present climate, says Premier.

But it means that Warburg's stake rises. The private-equity house agreed to pick up new shares not wanted by City investors, hence the increase in its holding to a level that means a future bid is possible.

It could also now take a seat on the board, giving it a strong say in how one of Britain's most important food makers is run.

The fees go to Citi, Hoare Govett, Goldman Sachs and Rothschild. There is rising concern at the level of fees such banks are charging to underwrite rights issues.

Critics of the investment banking industry note the fundraisers are often used to pay down debt public companies accumulated in the boom years on the advice of the bankers that are again cashing in.

Premier's new shares were issued at 26p, a 9% discount to the then share price. The stock was today steady at 29p.