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Argus Downgrades WhiteWave To Sell As Shares Move Close To Danone Buyout Offer Price

Argus Downgrades WhiteWave To Sell As Shares Move Close To Danone Buyout Offer Price
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Danone SA (ADR) (OTC: DANOY) made an offer on July 6 to acquire WhiteWave Foods Co (NYSE: WWAV) for $56.25 per share. WhiteWave’s shares are now trading close to the Danone offer price, Argus’s John Staszak noted and downgraded the rating on the company from Buy to Sell.

The Danone offer represented a 19 percent premium to the preannouncement share price, analyst Staszak mentioned, while adding that WhiteWave’s shares had gained 28 percent since coverage had been initiated on March 24, 2015.

Staszak believes that the higher bid would not emerge and that the Danone transaction would close by the end of this year, since there is unlikely to be any regulatory obstacles to the deal.

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Results And Guidance

WhiteWave had reported its 2Q16 EPS at $0.32, up from $0.26 in 2Q15 and ahead of the consensus estimate of $0.30. The company guided to 2016 EPS of $1.38-$1.41. The analyst expects WhiteWave to beat this guidance, driven by “market share gains in Europe and wider distribution of several key products.”

Although WhiteWave continues to face higher interest expense and currency headwinds, these impacts are moderating, Staszak stated. He reiterated the EPS estimates for WhiteWave on a standalone basis of $1.46 for 2016 and $1.66 for 2017.

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Latest Ratings for WWAV

Sep 2016BernsteinDowngradesOutperformMarket Perform
Aug 2016Argus ResearchDowngradesBuySell
Aug 2016Wells FargoDowngradesOutperformMarket Perform

View More Analyst Ratings for WWAV
View the Latest Analyst Ratings

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