This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

P&G to Weigh Options for Pringles

NEW YORK ( TheStreet) -- Procter & Gamble (PG - Get Report) is considering its options for its Pringles brand after would-be acquirer Diamond Foods (DMND) said it's restating its financials for the past two years.

Paul Fox, a spokesperson for P&G, said the news of Diamond Foods' restatement and its plans to replace top executives was "very disappointing" and that the company plans to look at its next steps as Pringles is a "very valuable asset" that has garnered interest from other parties.

"We're keeping all options open," Fox said.

Diamond Foods agreed to acquire the Pringles snacks brand from P&G in April for $1.5 billion in stock and the assumption of $850 million in debt.

Diamond Foods' shares were trading at around $60 in the wake of the Pringles' deal announcement in April. The transaction's original terms called for a swap of 29.1 million Diamond shares, which closed Wednesday at $36.66 and were down more than 40% in after-hours action.

On Wednesday, Diamond Foods said it was restating its results to properly account for certain payments to walnut growers and that an investigation by its audit committee found "material weaknesses" in its internal controls.

The company also named an acting CEO and CFO, placing Michael Mendes and Steven Neil on administrative leave, and said it's working to complete the restatements and file required reports with the Securities and Exchange Commission, which is probing Diamond Foods along with the Justice Department.

P&G's Fox would not elaborate on the number or names of the other companies interested in Pringles and said that the process would "take time."

Procter & Gamble told Forbes in December that its Pringles deal was contingent on a favorable outcome to the SEC investigation.

In a statement about the audit committee's findings, Diamond Foods said: "The Audit Committee has concluded that a 'continuity' payment made to growers in August, 2010 of approximately $20 million and a 'momentum' payment made to growers in September 2011 of approximately $60 million were not accounted for in the correct periods, and the Audit Committee identified material weaknesses in the Company's internal control over financial reporting."

Effective immediately, Rick Wolford was acting president and CEO of Diamond Foods and Michael Murphy was named acting chief financial officer. Wolford was previously the chief executive officer of Del Monte Foods. Murphy is a managing director at financial consulting firm Alix Partners.

Shares of Diamond Foods were last quoted at $20.95, down 43%, on volume of more than 6.4 million in extended trading.

-- Written by Alexandra Zendrian in New York.

>To contact the writer of this article, click here: Alexandra Zendrian
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DMND $37.56 0.97%
PG $80.12 0.45%
AAPL $93.74 -1.15%
FB $117.58 0.73%
GOOG $693.01 0.29%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs