JPMorgan Weighs In On The Probability For Higher Bids For WhiteWave Foods

WhiteWave Foods Co WWAV has announced that it has agreed to be purchased by Danone.

J.P. Morgan’s Ken Goldman downgraded the rating on WhiteWave Foods from Overweight to Neutral, while raising the price target from $48 to $56.25.

Competing Bids Unlikely

Goldman believes that another bidder is unlikely to emerge, with some potential suitors having mentioned in the past that they either had no interest in the company or were concerned regarding antitrust issues.

The remaining suitors are smaller than Danone and were likely to “have to issue a significant amount of equity to exceed $56.25/share,” the analyst said.

Therefore, Goldman expects the WhiteWave-Danone deal to be the one that goes through.

The analyst also noted that “WhiteWave was a bit of a throwback, a food/beverage company that put more effort into innovation and organic top-line growth than cost savings programs.”

According to the J.P. Morgan report, the company’s R&D efforts have often been very successful, while its earnings releases have been “organized and easily digestible,” contrary to that of many of its food peers.