NEW YORK (TheStreet) -- Rumors about a possible takeover of Newell Rubbermaid (NWL) - Get Report by Procter & Gamble (PG) - Get Report have been persistent over the last six months, but there's plenty of reason for skepticism, according to the results of a recent reader-opinion survey by TheStreet.
Buyout speculation has percolated into the markets at least three times since the start of the year, most recently on June 1, sending Newell options to their highest level in almost three months. For the same reason, call trading in Newell options surged in late January.
The companies, of course, have declined to comment,
in order to gauge the public's take on all the consumer-goods M&A speculation.
As it turns out, readers of
are mostly doubtful about the prospects for a deal, with the larger portion of voters, or 45%, dismissing the rumors as mere noise.
About 35% took the middle ground: they believe some truth may lie in the rumors, but that an acquisition is unlikely to happen any time soon. Meanwhile, roughly 20% of survey takers agreed that a takeover was afoot and that "it's happening soon."
As we stated in our poll, Deutsche Bank Securities analyst Bill Schmitz believes that there's no real overlap between P&G and Newell Rubbermaid -- the former sells consumable goods, while the latter sells largely semi-durable goods -- making it unlikely that the companies would go in for a tie-up. Schmitz hedged, however: it's possible, he said, that P&G could be interested grabbing Newell's foothold in emerging markets.
In its 2009 annual report, P&G noted that its U.S. business made up about 39% of its net sales. No other individual country had net sales exceeding 10% of total net sales that year, the company said.
In total, 43% of P&G's sales came from North America in 2009, compared with 21% from Western Europe, 4% from Japan, and 32% from developing markets, including Latin America, China, India and Southeast Asia. Procter & Gamble, in other words, might be looking to diversify.
A combining of the two companies could help P&G expand its international influence, especially in Europe, the Middle East and Africa, Latin America, and Asia, where Newell generated about $1.37 billion in sales in 2009, compared with total sales of about $5.58 billion.
-- Reported by Andrea Tse in New York
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