- Freshpet ( NASDAQ: FRPT ) rose 1% amid takeover speculation after J.M. Smucker ( NYSE: SJM ) agreed to sell several of its pet-food brands to Post Holdings ( POST ) for $1.2 billion.
- J.M. Smucker ( SJM ) implied that it will use the deal proceeds to look at another transaction and Freshpet ( FRPT ) could be a potential target with its premium pets business, Bernstein analyst Alexia Howard wrote in a note on Thursday.
- "At $3.0b in market cap, no net debt and a stock price that is around one third of where it was at its peak in April 2021, it's certainly looking more digestible now than it was a couple of years ago," Howard wrote.
- The takeover speculation comes as activist investor Jana Partners in December informed Freshpet that it intended to solicit proxies at the 2023 annual meeting. Jana bought shares in September and said it intended to hold talks with management regarding costs and operational capabilities. Barron's reported in early October that Freshpet had hired bankers to explore a potential sale .
- Howard also sees Simply Good Foods ( SMPL ) and BellRing Brands ( BRBR ) as "distant" possibilities for an an acquisition. SJM may also choose to stay "closer to home" with a private brand acquisition in the frozen snack area.
- BellRing ( BRBR ) rose almost 1% on Thursday and Simply Foods ( SMPL ) ticked up 0.4%
- J.M. Smucker ( SJM ) is set to present at the CAGNY conference on Feb. 22 and will release its Q3 earnings on Feb. 28.
- Also see SA contributor Dalius Taurus's piece from December entitled "Freshpet: Activist Pressure Might Lead To Company Sale."
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Freshpet gains amid takeover speculation after J.M. Smucker pet foods sale