Pactiv Jumps on Hopes of Bidding War

Pactiv shares rise sharply after two more bidders reportedly showed interest in buying the maker of Hefty trash bags.
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(Pactiv story updated with background information and closing share prices.)



) --



stock rose nearly 7% Wednesday after it was reported that two more bidders have become interested in buying the company, which makes a slew of consumer products, including Hefty garbage bags.

Pactiv shares closed Wednesday at $29.79, up $1.89, or 6.8%. Earlier in the session, the stock touched $29.88, a new 52-week high. More than 8 million Pactiv shares changed hands Wednesday, compared with average daily volume of about 2.6 million.

That brings the number of Pactiv suitors to three, increasing the odds that a sweeter deal awaits the company and its shareholders. According to analysts cited by

The Wall Street Journal

, which broke the news, a

Pactiv deal

could be worth more than $4 billion, which would value Pactiv at more than $31.10 a share.

On Monday, private equity giant

Apollo Global Management

entered talks to acquire the company in a leveraged buyout, the


reported, citing anonymous sources.



, the maker of Quilted Northern Ultra Plush toilet paper, and New Zealand's

Rank Group

, a private equity firm, have also entered the fray, according to the



The rumored bidding war comes amid rising M&A activity on Wall Street as borrowing costs for businesses have grown more attractive -- and even as Europe's debt crisis sparks a continued sell-off in equities markets around the world.

Pactiv could be a good fit for all three companies, with Georgia Pacific and several portfolio companies owned by Apollo having the greatest potential cost synergies, one consumer-goods stock analyst told



Apollo's Berry Plastics business, for example, could achieve an overlap with Pactiv in the areas of trash bags and plastic cups, among others, as well as savings on selling, general and administrative expenses and raw materials. A combination could result in more buying power for plastic resins, the analyst said.

Georgia-Pacific's Dixie cups and tableware businesses overlap with some of Pactiv's lines. Georgia-Pacific recently acquired Orbis Container Services, which makes plastic containers. If Pactiv became part of Georgia, the combination could also result in cost-savings on plastic resin purchases.

Rank's purchase of Pactiv, meanwhile, could result in synergies for their food packaging and consumer businesses. Rank -- the investment group of Graeme Hart, New Zealand's richest person -- paid $2.7 billion two years ago to buy that business from Alcoa.

-- Reported by Andrea Tse in New York


>>Pactiv Surges on Report of Buyout Talks

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