Kellogg (K) Picks Up Bargain, Diamond (DMND) Escapes in Pringle's Deal (PG)
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Looks like everyone's a winner with the Pringle's brand acquisition deal announced Wednesday. Kellogg (NYSE: K) said it would acquire the brand from Proctor & Gamble (NYSE: PG) in a $2.7 billion deal, following the cancellation of the transaction between P&G and Diamond Foods (Nasdaq: DMND).
Proctor & Gamble is up because it found a buyer for the brand. Investors might have been a little nervous the deal would not go through following the disclosure Diamond Foods would need to restate financials due to improper payments to walnut farmers. Even though P&G received less from Kellogg than the company would have from Diamond, shares are up about 0.4 percent this morning.
Kellogg is looking firm as the company got a decent asset at a discounted price. P&G initially expected to record a 55 cent to 65 cent gain on the sale to Diamond, but now P&G is modeling a gain of 47 cents to 50 cents.
Finally, Diamond Foods made out like a bandit as there was no cancellation fee on the deal. Investors might have been pricing in a fee that could've been in the tens of million of dollars range. No fee means Diamond is out scot-free.
Kellogg shares are up 4.5 percent while Diamond shares are up 2.4 percent Wednesday.
Proctor & Gamble is up because it found a buyer for the brand. Investors might have been a little nervous the deal would not go through following the disclosure Diamond Foods would need to restate financials due to improper payments to walnut farmers. Even though P&G received less from Kellogg than the company would have from Diamond, shares are up about 0.4 percent this morning.
Kellogg is looking firm as the company got a decent asset at a discounted price. P&G initially expected to record a 55 cent to 65 cent gain on the sale to Diamond, but now P&G is modeling a gain of 47 cents to 50 cents.
Finally, Diamond Foods made out like a bandit as there was no cancellation fee on the deal. Investors might have been pricing in a fee that could've been in the tens of million of dollars range. No fee means Diamond is out scot-free.
Kellogg shares are up 4.5 percent while Diamond shares are up 2.4 percent Wednesday.
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