Post Holdings working with bankers on possible Lamb Weston deal, sources say

Post Holdings

13/12/2024 22:03

(Adds Lamb Weston no comment in paragraph 5, stock price in
paragraph 7)
    By Abigail Summerville and Svea Herbst-Bayliss
       NEW YORK, Dec 13 (Reuters) - Post Holdings  POST.N  is
working with investment bankers to explore a possible
transaction with Lamb Weston Holdings  LW.N , a frozen potato
products maker facing pressure from an activist investor to sell
itself, two sources familiar with the matter said.
    For packaged goods company Post, which makes Grape Nuts
cereal and Bob Evans mashed potatoes, Lamb Weston has long been
an attractive business that it considered buying in 2015 when
the french-fry maker was still part of Conagra  CAG.N .
    Now Post is again exploring ways to own Lamb Weston and is
consulting with bankers in the tight-knit food industry, said
the sources who insisted on anonymity because the discussions
are private.
    Post has a market value of roughly $7 billion and the
sources said there would be considerable synergies with Lamb
Weston, which has a market value of roughly $10.5 billion, if a
combination were to occur.
    Post Holdings  POST.N  is working with investment bankers to
explore a possible transaction with Lamb Weston Holdings  LW.N ,
a frozen potato products maker facing pressure from an activist
investor to sell itself, two sources familiar with the matter
said.
    For packaged goods company Post, which makes Grape Nuts
cereal and Bob Evans mashed potatoes, Lamb Weston has long been
an attractive business that it considered buying in 2015 when
the french-fry maker was still part of Conagra  CAG.N .
    Now Post is again exploring ways to own Lamb Weston and is
consulting with bankers in the tight-knit food industry, said
the sources who insisted on anonymity because the discussions
are private.
    Post has a market value of roughly $7 billion and the
sources said there would be considerable synergies with Lamb
Weston, which has a market value of roughly $10.5 billion, if a
combination were to occur.
    Representatives for Post and Lamb Weston declined to
comment.
    Two months ago, activist investor Jana Partners said in a
securities filing that it built a roughly 5% stake in Lamb
Weston and wants the company to improve operations and capital
allocation and consider selling itself. The news sent the stock
price up roughly 10%.
    On Friday, Lamb Weston's stock climbed nearly 7% to close at
$79.27, shrinking its year-to-date decline to 25.6%.
    Jana is working on the investment with holding company
Continental Grain and has identified several industry
executives, including Lamb Weston's former executive chairman
Timothy McLevish, as potential board candidates.
    Wall Street analysts have said Cargill, Post, Tyson Foods
 TSN.N  and Kraft Heinz  KHC.O  could be hypothetical buyers. 
    Jana has a history with Lamb Weston and in 2015 pushed
Conagra, which owned the business at the time, to divest it.
Lamb Weston became a publicly listed company in 2016.
    Now the activist is pushing Lamb Weston to make changes or
possibly face a board challenge.
    Jana has extensive experience in the food sector, pushing
for improvements most recently at pet food manufacturer Freshpet
 FRPT.O , and in earlier campaigns at companies including Whole
Foods, Pinnacle Foods, Safeway and Conagra.
Post Holdings  POST.N  is working with investment bankers to
explore a possible transaction with Lamb Weston Holdings  LW.N ,
a frozen potato products maker facing pressure from an activist
investor to sell itself, two sources familiar with the matter
said.
    For packaged goods company Post, which makes Grape Nuts
cereal and Bob Evans mashed potatoes, Lamb Weston has long been
an attractive business that it considered buying in 2015 when
the french-fry maker was still part of Conagra  CAG.N .
    Now Post is again exploring ways to own Lamb Weston and is
consulting with bankers in the tight-knit food industry, said
the sources who insisted on anonymity because the discussions
are private.
    Post has a market value of roughly $7 billion and the
sources said there would be considerable synergies with Lamb
Weston, which has a market value of roughly $10.5 billion, if a
combination were to occur.
    Representatives for Post and Lamb Weston declined to
comment.
    Two months ago, activist investor Jana Partners said in a
securities filing that it built a roughly 5% stake in Lamb
Weston and wants the company to improve operations and capital
allocation and consider selling itself. The news sent the stock
price up roughly 10%.
    On Friday, Lamb Weston's stock climbed nearly 7% to close at
$79.27, shrinking its year-to-date decline to 25.6%.
    Jana is working on the investment with holding company
Continental Grain and has identified several industry
executives, including Lamb Weston's former executive chairman
Timothy McLevish, as potential board candidates.
    Wall Street analysts have said Cargill, Post, Tyson Foods
 TSN.N  and Kraft Heinz  KHC.O  could be hypothetical buyers. 
    Jana has a history with Lamb Weston and in 2015 pushed
Conagra, which owned the business at the time, to divest it.
Lamb Weston became a publicly listed company in 2016.
    Now the activist is pushing Lamb Weston to make changes or
possibly face a board challenge.
    Jana has extensive experience in the food sector, pushing
for improvements most recently at pet food manufacturer Freshpet
 FRPT.O , and in earlier campaigns at companies including Whole
Foods, Pinnacle Foods, Safeway and Conagra.
    Jana has extensive experience in the food sector, pushing
for improvements most recently at pet food manufacturer Freshpet
 FRPT.O , and in earlier campaigns at companies including Whole
Foods, Pinnacle Foods, Safeway and Conagra.

 (Reporting by Svea Herbst-Bayliss and Abigail Summerville;
Editing by Chizu Nomiyama and Bill Berkrot)
 ((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))