NEW YORK ( TheStreet) - Unilever ( UN) is set to acquire Russian cosmetic maker Concern Kalina, underscoring a growing trend of corporate deal-making in the consumer stock sector.
ConAgra said Ralcorp's board was "singularly focused" on its Post spinoff, refusing any attempts at M&A negotiations. ConAgra argued the "superior value and certainty" of its acquisition offer. ConAgra maintained that its offer represented a 44% premium to Ralcorp's March 21 closing price, the day before it made its initial bid; the maker of Chef Boyardee, Healthy Choice and Hebrew National food brands also said its bid was 32% higher than Ralcorp's all-time closing high. ConAgra has said that Ralcorp's Post Cereals spinoff plan "does not provide competitive value to Ralcorp's shareholders relative to ConAgra Foods' proposal." For ConAgra, acquiring Ralcorp and its roster of private-label brands would help it bulk up its generic food brands and better compete with other private-label providers as consumers continue to trade down to lower-priced offerings. Still, if Ralcorp is unwilling to negotiate at all, ConAgra is left with few choices. Ralcorp is incorporated in Missouri, a state with strict anti-takeover laws that protect unwilling targets. Ralcorp also instituted a poison pill that protects against hostile buyers by making unwanted acquisitions very expensive to the buyer. Additionally, Ralcorp announced in early August its plan to buy Sara Lee's ( SLE) refrigerated dough business for $545 million as part of its own efforts to bulk up its private-label operations.
Pepsi acquired around 1.4% of WBD's outstanding shares through a squeeze-out where majority shareholders effectively pressured minority holders to divest their shares. Pepsi now owns 100% of WBD's outstanding ordinary shares, including all ordinary shares underlying American depositary shares (ADS). Each WBD shareholder received 3,883.70 Russian rubles ($131.38) per share, the same price Pepsi offered to WBD shareholders in a recently completed tender offer in Russia. Each ADS holder will receive 970.925 Russian rubles ($32.75) per ADS in cash.
The Kamis acquisition is expected to add around $103 million in annual revenue to McCormick's operations, and 6 cents per share to 2012 earnings.
Icahn's original proposal was widely viewed as merely a way to put Clorox in play. Entities controlled by Icahn own roughly 9.4% of Clorox's outstanding common stock, making him the company's largest shareholder. He tapped consumer products makers Procter & Gamble ( PG), Unilever ( UN), Kimberly-Clark ( KMB) and Colgate-Palmolive ( CL) as possible "strategic buyers" that might offer "superior bids." "We are in a unique position as your largest shareholder in that we are wearing two hats -- one as a shareholder and another as a buyer," Icahn wrote in his July 15 letter.
But "PepsiCo isn't on the road to Splitsville any time soon," said IBISWorld beverage analyst Agata Kaczanowska. Its "dual portfolio
Kaczanowska pointed out that "in the US Soda Production industry the company has a 33.6% market share. It is second behind Coca-Cola ( KO) (41.2%) and is facing increasing competition from private labels and Dr. Pepper Snapple ( DPS) (15.4%) ... Comparatively, Frito-Lay has a 48.4% market share in the Snack Food Production industry, with Kraft and General Mills ( GIS) far behind with just 5.2% and 5.1% market share, respectively. "
"The company is not growing its earnings at a dramatic pace by these acquisitions, but price tags seem reasonable and the strategic importance should not be underestimated," noted analysts from Danske Markets. Electrolux had also been in talks to acquire bankrupt South Korean company Daewoo but those negotiations ended. It did recently acquire Egyptian appliance maker Olympic Group.
Ralcorp said the acquisition would add 30 cents a share to its earnings in the first year after the sale is complete. It plans to fund the deal through short-term debt. Ralcorp's purchase should help the private-brand food products maker improve its margins after it laid plans last month to spin off its Post Foods cereal unit. That announcement came on the heels of Ralcorp twice rejecting unsolicited takeover bids from ConAgra Foods ( CAG). Sara Lee announced its intention to divest its refrigerated dough business earlier this year. The unit makes up about 3% of its annual revenue.
The sale comes as part of Sara Lee's larger plan to spin off its North American retail and food service business, a company that will trade publicly and retain the Sara Lee name. That business includes brands such as Hillshire Farm lunch meat, Ball Park hot dogs and Jimmy Dean sausages. The other company, Sara Lee's remaining international bakery and beverages businesses, which includes Douwe Egberts and L'Or brands, was as yet unnamed but referred to as CoffeeCo and could be based overseas. The split was announced in January, and in May, Sara Lee said it was on track with the split, expected to be complete in 2012.
The deal also included Colgate selling its laundry detergent business in Colombia to Unilever for $215 million. The selloff of Unilever's deodorants and bath-care business in Europe was required on antitrust grounds for European Union's clearance of the $1.82 billion purchase of Sara Lee's ( SLE) personal care business in 2010.
The deal did not come as a surprise as Wendy's has said it was looking for strategic alternatives for Arby's, which has trailed Wendy's performance. Under the terms of the deal, Wendy's will retain an 18.5% stake in Arby's, which has more than 3,600 restaurants systemwide. Wendy's will receive $130 million in cash at the closing of the deal; its 18.5% stake is expected to be valued at around $30 million.
Atlanta-based Roark Capital Group will assume around $190 million in debt related to the Arby's chain, which mainly consists of capital lease and sale-leaseback obligations. Wendy's expects to realize an income tax benefit of around $80 million over the next few years. The deal was expected to close early in the third quarter.
The deal valued California Pizza Kitchen at $18.50, a premium of nearly 11% compared with the California Pizza's closing price of $16.71 the day before news of the deal was reported. California Pizza Kitchen, a casual-dining restaurant chain, operates around 250 stores in 32 states and a few foreign countries. The pizza chain last spring hired an investment bank to explore a potential sale.
Hershey ( HSY)
Citi analyst David Driscoll noted that West's exit from Hershey's masthead could make the company a prime
Sara Lee ( SLE)
Sara Lee intends to spin off its North American retail and food service business, a company that will trade publicly and retain the Sara Lee name. That business includes brands such as Hillshire Farm lunch meat, Ball Park hot dogs and Jimmy Dean sausages. The other company, Sara Lee's remaining international bakery and beverages businesses, which includes Douwe Egberts and L'Or brands, was as yet unnamed but referred to as CoffeeCo and could be based overseas. On May 5, Sara Lee said it is on track with the split, expected to be complete in 2012. On May 4, Sara Lee completed the sale of its global shoe-care business, in a majority of countries, to SC Johnson for 245 million euros ($364 million). The sale of its North American fresh bakery business should close by the end of this fiscal year, Sara Lee said. Its insecticides business sale is expected to close in the second half of 2011. Sara Lee also said it acquired Aidells Sausage for $87 million in cash during the recent quarter in an effort to boost its meat business in North America and expand its footprint into the market of organic and natural meats.
McCormick & Schmick's Seafood Restaurant ( MSSR)
P&G shareholders will retain a 57% stake in the new company while Diamond shareholders will hold the rest. Diamond shareholders will also take on $850 million of Pringles debt. Diamond Foods, meanwhile, acquired Kettle Foods for $615 million in 2010. In 2008 it acquired Pop Secret from General Mills ( GIS) for $190 million, and in 2006 it acquired certain assets from Harmony Foods. Diamond, best known for its Emerald brand of nuts and trail mixes, Pop Secret popcorns and Kettle potato chips, will more than triple the size of its snack business with the addition of Pringles. The company now expects net revenue to total $1.8 billion in the fiscal year ending July 31, 2012.
Yum! Brands ( YUM)
Yum! said it was looking for a buyer for LJS and A&W but had yet to find one. "We do not believe Long John Silver's and A&W-All American Food restaurants fit into our long-term growth strategy," CEO David C. Novak said. "Accordingly, we have decided to put these two great brands up for sale and we will complete the sale only once the right buyer or buyers have been identified and we can ensure a seamless transition." Yum! added that it "does not expect the eventual sale to have a material impact to its ongoing earnings or cash flow." -- Written by Miriam Marcus Reimer in New York. >To contact the writer of this article, click here: Miriam Reimer. >To follow the writer on Twitter, go to http://twitter.com/miriamsmarket. >To submit a news tip, send an email to: email@example.com.
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