Sector Update: Consumer


Shutterstock photo

Consumer stocks were considerably higher Monday afternoon, with shares of consumer staples companies in the S&P 500 adding more than 1.4%. Shares of consumer discretionary firms in the S&P 500 were up about 1.1%.

In company news, Pinnacle Foods ( PF ) shares raced to an all-time high Monday, jumping more than 17% after the packaged foods company accepted a $6.6 billion buyout offer from Hillshire Brands ( HSH ).

HSH said the deal is expected to immediately add to its earnings, with per-share net income for the combined companies rising more than 15% over its year-ago EPS. The projections include around $140 million per year in expected cost synergies derived from supply-chain enhancements and consolidating overhead expenses. Revenue is seen growing due to expanded brand portfolio and broader in-store reach.

HSH also will acquire about $390 million in PF tax assets.

Under terms of the deal, PF sharesholders will receive $18.00 in cash and one-half of a HSH share for each share they now own. The $36.02 per share purchase price marks an 18% premium to PF's $30.45 a share closing price on Friday.

PF shares were up 13.5% at $34.55 each in recent trade, earlier climbing to a record high for the stock at $35.67 a share. HSH shares recently were off 4.9% at $35.14 each, maintaining a small margin above its intra-day low of $36.22 a share, sinking more than 7%.

In other sector news,

(+) RDEN, (+1.9%) Shares rising ahead of the beauty products company's tonight reporting fiscal Q3 results. Analysts, on average, are expecting RDEN to report a break-even quarter on a per-share basis on around $256.86 mln in revenue.

(-) BPI, (-8.2%) Q1 net loss of $0.10 per share is $0.09 wider than the Capital IQ consensus. Revenue falls 27.7% year over year to $160.5 mln, trailing Street view by $9.89 mln.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities
More Headlines for: PF , HSH

More from MT Newswires


MT Newswires

MT Newswires

Market News, Commodities
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by