NEW YORK (TheStreet) -- Shares of Ball Corp. (BLL - Get Report) are higher by 4.01% to $68.80 in pre-market trading on Thursday morning, following the company's statement relating to the possible acquisition of its U.K. rival Rexam PLC. (REXMY) .
Ball Corp., a supplier of metal packaging to the beverage, food, personal care and household products industries, announced that its board of directors is in discussions regarding the possibility of acquiring beverage can maker Rexam.
"The proposed transaction includes a combination of cash and equity," Ball Corp said in a statement, adding that "there is no certainty any formal offer will be made."
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The potential offer values Rexam at $6.54 billion, Reuters reports.
Separately, TheStreet Ratings team rates BALL CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BALL CORP (BLL) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 33.33% and other important driving factors, this stock has surged by 30.16% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- BALL CORP has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BALL CORP increased its bottom line by earning $2.73 versus $2.56 in the prior year. This year, the market expects an improvement in earnings ($3.90 versus $2.73).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Containers & Packaging industry average. The net income increased by 27.9% when compared to the same quarter one year prior, rising from $115.20 million to $147.40 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Containers & Packaging industry and the overall market, BALL CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- BLL, with its decline in revenue, slightly underperformed the industry average of 6.2%. Since the same quarter one year prior, revenues slightly dropped by 1.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: BLL Ratings Report