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NEW YORK (
Del Monte Foods(DLM) stock is popping Friday morning on the company's agreement to be acquired by a group of private equity firms for $19 a share in cash.
Shares of Del Monte finished Friday's trading session up 4.7% to $18.83.
The firms consist of
Kohlberg Kravis Roberts(KKR - Get Report),
Vestar Capital Partners and
Centerview Partners, and their offer represents a premium of about 40% over Del Monte's average closing share price during the past three months prior to November 18, when market rumors of a transaction began.
This is also higher than any price the company's stock has ever achieved.
The deal, wholeheartedly approved by Del Monte's board of directors, is valued at about $5.3 billion. The buyers have already secured financing from
Bank of America Merrill Lynch,Barclays Capital,JPMorgan Chase,Morgan Stanley and
KKR Capital Markets.
In the meantime, Del Monte is permitted to accept alternative proposals from other parties through January 8, 2011. If it doesn't find an superior offers, the deal with this trio of private equity firms can be expected to close by the end of Mar. 2011.
Del Monte currently generates about $3.7 billion in annual revenue. When the transaction is complete, the company will keep its corporate headquarters in San Francisco.
In light of the announcement, Del Monte will no longer host a conference call to discuss its fiscal 2011 second quarter earnings on December 2.
Some of the top gainers of the consumer non-cyclical group Friday were food companies.
Seneca Foods(SENEB - Get Report) rose 5.3% to $23.50, while
Bridgford Foods(BRID - Get Report) finished up 5.1% to $12.47.
Synutra International (SYUT - Get Report) surged by 17.1% to $14.23.
-- Written by Andrea Tse in New York.
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