WhiteWave (WWAV) Stock Surges on Danone Deal

WhiteWave (WWAV) stock is spiking Thursday morning after Danone (DANOY) said it would buy the company for $56.25 per share.
By Kaya Yurieff ,

NEW YORK (TheStreet) -- Shares of WhiteWave Foods (WWAV) are soaring 18.95% to $56.42 on heavy trading volume Thursday morning after yogurt maker Danone (DANOY) agreed to acquire the company for an enterprise value of about $12.5 billion.

Paris-based Danone will pay $56.25 per share for the organic food producer, which represents a premium of about 24% over WhiteWave's 30-day average closing price.

The acquisition will double the size of Danone's U.S. business, according to a company statement.

The transaction is expected to close by the end of the year and is subject to approval from regulators and WhiteWave's shareholders.

Denver-based WhiteWave has been one of the fastest growing companies in the industry in recent years and has been boosted by higher demand for healthy and organic foods, the Wall Street Journal noted.

Additionally, the deal is a great post-Brexit signal, RealMoney's Antonia Oprita wrote in an article this morning.

Jefferies raised its price target on WhiteWave to $56 from $53 and maintained its "buy" rating after the acquisition was announced.

"WWAV has largely been considered one of the most likely buyout candidates in our space with a relatively long list of potential buyers including, but not limited to, Danone, General Mills (GIS), Nestle, PepsiCo (PEP) and Coca-Cola (KO)," the firm noted.

Given that the 24% premium is below the 30% premium that buyers typically offer in a takeout bid, Jefferies believes additional bidders are a possibility.

About 10.77 million of WhiteWave's shares changed hands so far this morning compared to its average 30-day volume of 1.54 million shares per day.

Shares of Danone are climbing 2.24% to $14.47 this morning.

(WhiteWave is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holding with a free trial here.)

Separately, TheStreet Ratings Team has a "Buy" rating with a score of B on the stock.

The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, expanding profit margins, notable return on equity and compelling growth in net income.

The team believes its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: WWAV

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