Yes, thank you. Reuters finally caught us up on what was going on. Still, the potential acqustion will not occur now until November and will be at a higher price than what has previously been discussed. I would count this as neutral/negative for FDP.
MILAN, Oct 1 (Reuters) - Japanese conglomerate Sumitomo (8053.T: Quote, Profile, Research) is among the possible buyers of a 40 percent stake in Del Monte Pacific (DMPL.SI: Quote, Profile, Research) currently held by insolvent Italian food group Cirio, one of its administrators said on Friday.
Tinned food producer Cirio, one of Italy's best-known brand names, defaulted on 1.1 billion euros in bonds in November 2002 and is being liquidated after investors rejected a restructuring plan.
"Sumitomo has also stated an interest in the (Del Monte Pacific) stake," said administrator Mario Resca.
Other potential buyers are tinned food and pickles producer Heinz (HNZ.N: Quote, Profile, Research) , Southeast Asia's largest food and beverage firm San Miguel (SMC.PS: Quote, Profile, Research) and U.S.-based fruit distributor Fresh Del Monte (FDP.N: Quote, Profile, Research) .
The heavyweight bidders are finalising their valuations, Resca said.
Specialising in pineapple-based drinks and food, the Philippines' Del Monte Pacific reported a 23 percent fall in second-quarter net profit to $6.6 million.
"It is significant that a competitor of Sumitomo's calibre has entered the bidding at this stage," Resca added.
Sumitomo's business includes insurance, cement, forestry, and metal mining. Sumitomo Rubber Industries Ltd. (5110.T: Quote, Profile, Research) owns the right to produce Dunlop and Goodyear tyres in Asia.
Fresh Del Monte has already bought former Cirio asset Del Monte Foods for $340 million, and the purchase was officially closed on Thursday, Resca said.
He said Fresh Del Monte Chairman Hani El-Naffy took up positions at the boards of several units controlled by Del Monte Foods.
� Reuters 2004. All Rights Reserved.
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Companies mentioned in this article
Data as of 1 Oct 2004 16:23 ET. Delayed at least 15 to 20 minutes.
Symb Company Last Chg Chg %
5110.T SUMITOMO RUBBER 1069.00 +3.00 +0.28%
8053.T SUMITOMO CORP 847.00 +27.00 +3.29%
DMPL.SI DEL MONTE 0.66 -0.02 -2.22%
FDP.N FRSH DEL MONTE 25.03 +0.12 +0.48%
HNZ.N H J HEINZ CO 36.66 +0.64 +1.78%
SMC.PS SAN MIGUEL-A 57.50 0.00 0.00
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq and all other quotes delayed by at least 15 minutes.
Thanks for the update. I apologise, my information on DeRica is about five days behind yours. I understood that they had to go back two times to entertain higher bids from the two main companies. I assume that has delayed the DM Pacific sale into November at this point. Since you are telling me that there is a new bidder for DM Pacific I assume they haven't identified the short list yet? I think when we were talking about this back a few months the sale was supposed to take place just after the Sept earnings cc.
I don't understand too well your point about Cirio-DeRica sale delay.
First,Cirio-DeRica (mainly canned tomatoes,peas etc. in Italy)few days ago was already sold to an italian company.
Second,FDP never bidded for it.
FDP is bidding for Del Monte Pacific,in few weeks is expected the result.
The only news regarding it is that there is a new bidder,a Japanese company.
Glad to see your comments if you'll get the chance.
Thanks for your informative posts.
Yes there was my expected downturn, but I'm not buying today for the following reasons;
The miss today was pretty large and some of the factors listed in the press release are likely to spill over even into next year. Even before the exact % of the negative factors will be known from the cc and financial data the analysts will be plugging their projections into their models. I would think an analyst would be irresponsible to rate this stock a "strong buy" in the short run. I would expect at least one bullish analyst to change the rating to short term hold long term buy. That would be an additional drag on the stock.
There was a lot of activity in the 25 puts which leads me to believe there is money waiting to get in (some traders sell a put to reduce the cost of the stock when they intend to buy it on a dip). Since most of the action today was in the Dec 25s I would guess that they are expecting the stock to tread water for the next few months.
Third, the Cirio Di Rica sale is taking longer than planned due to additional bidding phases to get a better price. Each new phase is delaying the Del Monte Pacific sale further into the future. That will be another important acquisition and until it is complete there is an extra uncertainty in the market.
I think the danlps1 post 12379 and the pregnantstocks post at 12397 both hit the mark. I also am not going to second guess golf4michaels $23.50 bottom estimate. Personally, since I am not in the stock, I will wait till we get closer to the June 2005 calls, the cc and the release of the financials. If you are a long term investor itching to get in and want my opinion, I would probably wait a week till the analysts crunch their numbers to see if there is a downgrade. If you are a short term trader I would not buy now because you might wind up sitting on dead money for 90 days.
Capex required for recent acquisition. No currency bump. Oil up. Bleed over from early q2 blooming. Shipping disruptions. Recent trucking acquisition.
What is going to save FDP this quarter is bananas. Still looking for a blip down though the stock has been strong. Hope to catch it at the bottom. Good luck.