French food group Danone's shares rise after bid speculation report
Shares in French food group Danone rose on Monday after the New York Post newspaper said in a report over the weekend that Danone could be a takeover target. (http://nyp.st/2vxjSjj)
Danone`s shares were up 1.5 percent at 65.86 euros at 1030 GMT, valuing the company at around 44 billion euros ($52 billion) and putting them among the top performers on France`s CAC-40 market index. They also outperformed the STOXX Europe 600 Food & Beverages index which was up 0.8 percent.
The New York Post cited a stock market tipster as saying "someone is going to buy Danone", with the tipster adding that "Danone could be bought by a Kraft or a Coke, and the French government would allow it."
A spokeswoman for Danone, the world`s largest yoghurt maker whose brands include Actimel and Activia, said the company had no comment to make on the report.
Meriem Mokdad, fund manager at Roche Brune Asset Management, said that while Kraft and Coca-Cola were able to make a move on Danone, she remained cautious about the report.
"Those two companies have the means of launching a bid for Danone, but nevertheless we remain quite wary about this rumour and will wait to see if any more details or developments emerge," said Mokdad, whose firm owns Danone shares.
Benoit de Broissia, fund manager at Paris-based investment firm Keren Finance which also holds Danone stock, said Danone was a "usual suspect" for bid speculation given consolidation activity within the industry, but also noted that the New York Post article was lacking in details.
Earlier this year Kraft Heinz abandoned its attempt to buy Unilever after its $143 billion approach met with stiff resistance, while Danone has been on the takeover trail itself, buying U.S. organic food producer WhiteWave this year.
French governments have traditionally sought to prevent their leading companies from being taken over by foreign rivals.
In 2005 France dashed to the support of Danone in the face of a rumoured bid from Pepsi, which never materialized. (http://reut.rs/2wHZQTw)
Danone said last month that it expected sales growth to accelerate in the second half of the year after challenging conditions in Europe and North America hit its dairy business in the second quarter.
($1 = 0.8475 euros)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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