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Friday, December 15, 2017

Long trade : Snyder's-Lance (LNCE) +20% (12/17)

  • 18 Dec 2017:  Snyder's-Lance (LNCE) to be acquired by Campbell Soup (CPB) for $50.00/share.
  • Dec 8:  $38.5;  vol. 454K

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Dec 15: (CNBC) Campbell Soup in advanced talks to buy snacks maker Snyder's-Lance
Campbell Soup Co is in advanced talks to acquire snacks maker Snyder's-Lance Inc, a deal which could be announced as early as next week, CNBC reported on Friday, citing sources familiar with the situation.

The deal could value the Pretzels and Cape Cod chips maker at about $50 per share, CNBC reported. (

At $50, a deal would value Snyder's at about $4.87 billion.

The offer represents a 27 percent premium to Snyder's close on Wednesday, a day before CNBC first reported that the company had hired an investment bank to weigh a potential sale following an approach from Campbell.

Snyder's shares, which hit a record-high of $47.56 in regular trading, were up 4.8 percent at $49.02 in aftermarket trade on Friday.

Snyder's was not available for comment outside of its business hours on Friday. Campbell said the company does not comment on rumor or speculation.

Campbell's push into snacks comes as the company struggles with declining soup sales in the United States and competition from private label brands.

  • CPB:  Camden, New Jersey-based Campbell has reported falling sales as more people avoid processed foods. Besides its canned soups, it makes Goldfish crackers, V8 juices and Prego pasta sauces. It bought organic broth maker Pacific Foods this year to shift its product lineup toward foods seen as healthier.
  • LNCE:  Snyder's-Lance's brands include Pop-Secret popcorn, Stella D'oro cookies and Snyder's of Hanover pretzels.
Update Mon 12/18/17:
Snyder's-Lance agrees to be acquired by Campbell Soup (CPB) for $50.00/share in cash 
Campbell plans to finance the acquisition through $6.2 billion of debt comprising a combination of long-term and short-term debt. Pro forma leverage is expected to be 4.8x at closing, and the company is committed to deleveraging to approximately 3x by fiscal 2022. Campbell will suspend share repurchases to maximize free cash flow for the purposes of paying down debt. Campbell also expects to maintain its current dividend policy.
  • The closing of the transaction is subject to the approval of Snyder's-Lance shareholders, as well as customary regulatory approvals and other closing conditions. Certain members of the Warehime family, who collectively own 13.2 percent of Snyder's-Lance's outstanding common stock, have agreed to vote their shares in support of the transaction. Closing is expected by early second quarter of calendar 2018. Campbell expects the acquisition to be accretive to adjusted EPS in fiscal 2019, excluding integration costs and costs to achieve synergies.

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