NEW YORK (TheStreet) -- Kellogg Co. (K) , maker of breakfast cereals and other packaged food, is seeking to buy a majority stake in Egypt's Bisco Misr, a confectionery-maker in the most populous Arab country, Bloomberg reports.
Bisco Misr said in a statement it agreed to a due diligence by Kellogg before a possible acquisition of at least 51%. That's the third due diligence request Bisco Misr received this year after private equity firm Abraaj Group and Saudi Arabia's Savola Group made similar moves, Bloomberg said.
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"Whoever wants to get exposure into this market, it would like to look at someone like Bisco Misr," Allen Sandeep, Cairo-based director of research at Naeem Brokerage, said. "With a market that has a population of 90 million, you look at any sub-segments within the consumer and food sectors and and there is massive potential."
Bisco Misr, founded in 1957, reported a profit of 5.5 million Egyptian pounds ($769,000) in the second quarter compared with 13.4 million pounds a year earlier. It previously refused two other takeover bids, Bloomberg noted.
Shares of Kellogg closed at $64.97 on Friday.
TheStreet Ratings team rates KELLOGG CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate KELLOGG CO (K) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."