Dean Foods Co., the biggest U.S. dairy processor and the worst performer on the S&P 500 last year, rose 11 percent in New York trading after Appaloosa Management LP said it holds a 7.4 percent stake.
Appaloosa, founded by the billionaire investor David Tepper, holds 13.4 million Dean shares, according to a filing. Tepper declined to comment on whether he thinks Dean is an acquisition target or whether he plans to reach out to Dean’s board or executives to give direction.
“We don’t typically file on things that we don’t think are going to go higher,” Tepper said today in a telephone interview from Short Hills, New Jersey, where his company is based.
Dean’s net income has declined year-on-year for the last four quarters. Earnings have been squeezed by retailers asking for price concessions and consumers switching to cheaper products. Dallas-based Dean had about $4 billion in debt as of Sept. 30, it said in a Nov. 9 statement.
Dean is “like a cheap leveraged buyout that trades publicly,” Tepper said. “It just has that appearance. I don’t want to do anything with it.”
Any decision to increase the stake in Dean depends on the price of the stock, he said.
Dean climbed $1 to $9.89 at 4:15 p.m. in New York Stock Exchange composite trading, the biggest gain since Dec. 9. Dean dropped 51 percent last year.