Piper Sandler expects US FTC to clear Campbell Soup's deal for Rao's sauce maker

Sovos Brands

17/10/2023 11:51

** Piper Sandler says antitrust clearance from U.S.
regulators for Campbell Soup's  CPB.N  $2.33 bln buyout of Rao's
owner Sovos Brands  SOVO.O  likely but not guaranteed 
    ** Cuts PT on stock to $44 from $50 owing to deal dilution
and slower than expected near-term sales trends
    ** Deal will make CPB owner of the No. 1 and No. 2 pasta
sauce brands in the category, with a ~35% market share - analyst
Michael Lavery
    ** Says Rao's price point is about three times that of CPB's
Prego's sauce, "a clear sign that the two sauce brands attract
different consumers"
    ** "Do not (at least not yet) consider appetite suppressants
like Ozempic to be a risk, given their lack of affordability and
accessibility" - Piper Sandler
    ** After market close on Monday, Sovos's shareholders voted
in favor of the acquisition by CPB
    ** Three of 18 brokerages rate the stock "buy" or higher, 10
"hold" and five "sell" or lower; their median PT is $45
    ** Stock down 30% YTD, as of last close    

 (Reporting by Savyata Mishra in Bengaluru)
 ((Savyata.Mishra@thomsonreuters.com))