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Flowers Foods, Inc. Message Board

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  • RetiredPaperman RetiredPaperman Jan 20, 2000 9:39 PM Flag

    Big Keebler Purchase

    why KBL has dropped 3 points in the last 10 days.
    The Market always seems to know about these sort of
    things before the regular people find out.

    sure they know what they're doing but it seems they
    paid a pretty high price - $250MM for $200MM in sales.
    That equates to a "price to sales" ratio of 1.25.
    Keebler's own p/s ratio is .86 and FLO's is only .38. I
    checked a few others and many quality food stocks are
    trading at a price to sales ratio of .5.

    This move
    would also seem to put the kabosh on KBL buying FLO or
    anyone else buying KBL. Certainly makes it much more
    expensive to do so, plus, who would want to buy a company
    while they are trying to merge a new company?

    certainly could be wrong but I would guess this would knock
    a few more points off of KBL in the next few days.
    FLO would follow it down, though not point for point.
    Anyway, just my guess and we'll find out in about 12

    I'm not suggesting this is a bad strategic move by
    Keebler; not enough info to make such a call at this
    point. It's just that normally the acquirer suffers for
    a while in these deals.


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    • Is this what happens when I have one of those
      rare days when it's virtually impossibe to check on
      all of you??

      Don't rule out the food
      consolidation wild card; we don't know what potential suitors
      are thinking and, with most food stocks selling at or
      near multi-year lows, I wouldn't put the "kabosh" on
      anything just yet.

      Also, I own a large amount of
      FLO with no intention of selling at this level; with
      my luck, I'd sell and then find out my exit point
      was at or near the bottom. It's still only January
      with a long year ahead!

      If a recession begins
      later in the year because of higher interest rates, FLO
      is going to look palatable for many more investors.

18.80+0.06(+0.32%)May 27 4:03 PMEDT