Associated British Foods has announced a bumper special dividend for its shareholders as a worldwide search for acquisitions concluded that the prices of prospective food companies were simply too high.

The cash-rich British food group, which markets Silver Spoon sugar, Kingsmill bread and Twinings tea, decided to return around one-third of its cash pile to investors.

It is returning £448 million sterling (€679 million) via a 50p per share special dividend and then consolidate its shares with 88 new shares for every 100 existing ones.

The action follows a similar move by Unilever Plc/NV in February, to return £5 billion after a fruitless acquisition search.

The payout, to be made in May, kick-started ABF's share price

Its shares closed over 5 per cent higher, up 21 3/4p at 448p, in a firmer London stock market.