Thursday, July 7, 2016

Danone to buyout WhiteWave Foods

Big news today for our portfolio.  Danone has offered to buy WhiteWave Foods for $56.25/share. The shares have actually traded above the buyout price all morning which shows traders and investors believe the company is worth just a bit more.  Usually the shares trade right up to the buyout price.

I'm happy to see one of the picks being bought out. It means the company was bringing great value, and innovation to it's customers.  It also means the company is well run.  I'm actually a bit sad I won't have the shares anymore. I have owned shares in this company since 2014. I was a huge believer in it's mission, and I thoroughly enjoy many of their brands. 

Oddly enough I had been casually looking over Danone's business as I'm trying to find some good names at attractive prices. I mentioned in the portfolio review that European names are some of the few areas I'm seeing attractive valuations. I tend to like defensive names and Danone was fitting the bill. I'll have to keep an eye on the shares just a bit more now as I'd like to keep myself invested in the "healthier for you" food business.

WhiteWave was trading at a premium to begin with and the buyout offer definitely is a bigger premium.  I think in 5 years that will look like a pittance to pay.  the company has been growing sales at a phenomenal clip the last few years with no signs of slowing down.  This will be a nice boost for Danone who will now have more sales in dollars translated into what seems to be continuously weaker Euro's. 

Hain Celestial is also trading higher today in sympathy.  Hain has also been rumored to be a takeover target in recent years.

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