Jim Cramer -- McCormick's Secondary Shaping Up to Be a Smart Move

Investors must like McCormick's Deal.
By Bret Kenwell ,

While North Korea, Walt Disney Co. (DIS) - Get Report , Netflix Inc. (NFLX) - Get Report and others fill our headlines Wednesday, there's also an important development to watch in the market.

"It's important to point out the secondaries are working," TheStreet's founder Jim Cramer, who also manages the Action Alerts PLUS charitable trust portfolio, said on CNBC's "Stop Trading" segment.

Hyatt Hotels Corporation (H) - Get Report is selling an additional 8.65 million shares in a secondary offering, but Cramer was more focused on McCormick & Company, Inc. (MKC) - Get Report . The company sold 5.52 million shares at $90.50, which will be used in part to fund the acquisition of Reckitt Benckiser. At midday, shares were up 4.3% at $97.01.

In mid-July, McCormick announced it would buy the company for $4.2 million. McCormick owns brands like Frank's RedHot and French's Mustard. The secondary offering is expected to raise about $480 million in capital.

Despite the secondary offering pricing coming in below what investors were expecting, demand appears to be strong. Shares are up 3.5% to $96.18, Cramer noted. Many investors must believe that the deal to buy Reckitt Benckiser is a good one, he added.

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At the time of publication, Cramer's Action Alerts PLUS had no position in any companies mentioned.

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