Diamond Foods Jumps on Report That Kellogg Wants to Buy Itby
The takeover price could be more than $1.5 billion, or $35 to $40 a share, said the New York Post, citing unidentified sources. Diamond was valued at about $1.1 billion as of Friday’s close, with a price-to-earnings ratio of 28.4.
Kellogg, known for brands like Froot Loops and Corn Flakes, is trying to adapt to U.S. consumers shifting away from breakfast cereals. One bright spot for Kellogg has been Pringles, the potato chip brand it bought from Proctor & Gamble Co. in 2012. Acquiring more snack foods, especially Diamond’s popular nut lineup, could help offset the decline of cereal.
Diamond’s stock rose $2.16 to close at $34.99 in New York. The shares are now up 24 percent this year.
Kellogg, based in Battle Creek, Michigan, declined to comment on the Post’s report. Diamond did not respond to a request for comment.