Early on Thursday, worldwide food products maker H.J. Heinz Company (HNZ) announced that it will be acquired by Warren Buffett’s Berkshire Hathaway and private equity firm 3G Capital.
Heinz will be purchased with cash for $72.50 per share, or $28 billion. This represents a 20% premium to Wednesday’s closing price of $60.48.
“The Heinz brand is one of the most respected brands in the global food industry and this historic transaction provides tremendous value to Heinz shareholders,” said Heinz CEO William R. Johnson.
He went on to add, “We look forward to partnering with Berkshire Hathaway and 3G Capital, both greatly respected investors, in what will be an exciting new chapter in the history of Heinz. With Heinz stock recently at an all-time high and 30 consecutive quarters of organic topline growth, Heinz is being acquired from a position of strength. As a private enterprise, Heinz will have an opportunity to drive further growth and advance our commitment to providing consumers across the globe with great tasting, nutritious and wholesome products.”
Berkshire Hathaway and 3G Capital will finance the deal with a combination of cash and debt financing from JP Morgan and Wells Fargo.
The deal is subject to approval by Heinz shareholders and regulatory approval; it is expected to close in the third quarter of 2013.
Due to the news of Berkshire Hathaway’s acquisition of Heinz, shares soared $12.47, or +20.62%, during pre-market trading on Thursday.
The Bottom Line
Shares of Heinz (HNZ) have a dividend yield of 3.41% based on last night’s closing price of $60.48 and the company’s annualized dividend payout of $2.06. Heinz has been a “Recommended” stock since January 24, 2009. We would recommend investors to hold onto shares for now, as there may be potential for a higher bid.
H.J. Heinz Company (HNZ) is recommended at this time, holding a Dividend.com DARS™ Rating of 3.6 out of 5 stars.
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