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   Strategies & Market TrendsSpeculating in Takeover Targets


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To: richardred who wrote (5992)10/20/2020 11:54:47 AM
From: richardred
   of 6101
 
RE-CTG Speculation I listened to the earnings call . BP/Hilcorp customer retained. IBM contract negotiations move forward to Nov. 27. Their IBM business will most likely be split with the announced IBM spinoff. The board saw, but no comments will be made on AGS filing. Higher margin solutions business makes up about 40% of the business. The company will sacrifice lower margin staffing business to concentrate on solutions and focused staffing business. Renewing staffing business that makes sense within the business plan. No guidance moving forward.

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To: richardred who wrote (5593)10/21/2020 11:35:30 AM
From: richardred
   of 6101
 
The trend of consolidation continues in the oil patch. Stock deals are still prevalent, and there's little money to be made on takeovers IMO. I had two previous deals that turned out to be takeunders. I exited all energy in my portfolio earlier in the year. I think it would take oil north of 50 for several quarters for me to get interested in quality survivors.

Pioneer Natural Resources Confirms Acquisition of Parsley Energy for $4.5 Billion
BY MT Newswires
— 9:02 AM ET 10/21/2020

ConocoPhillips in Talks to Buy Concho Resources in Big Shale Bet By
Ed Hammond
,
Kiel Porter
, and
Scott Deveau

October 13, 2020, 9:05 PM EDT Updated on October 14, 2020, 10:05 AM EDT


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To: richardred who wrote (5994)10/21/2020 11:56:13 AM
From: robert b furman
1 Recommendation   of 6101
 
Hi Rick,

I'm sticking with my energy positions and averaging down.

With the mergers really happening in numbers now, there is solid logic behind the view that mergers and acquisitions en mass are a bottoming action.

There may well be a laggard, but his is a good sign.

When the E&P's merge, they gain scale and can reduce headcount from duplication of employees.

A reduced overhead and economies in scale could well allow a more OPEC glut control and still be profitable.

Shale producers up to their neck in debt have pumped oil at maximum volume whether it made sense or not.

This looks very similar to the old Micron buys up memory makers and suddenly there were three memory makers Micron,SK Hynix , and Samsung.

Guess what, they all miraculously started making big money.

I'll grant you there are more supers ajjor oil companies out there than 3, but Shell, BP have removed themselves from Active drilling nd are aiming for lowering their carbon footprint as they shift to renewables.
Since Europe has a bad case of loving the renewables vs natural gas/LNG, I suspect ENI and Total are not far behind BP and Shell in leaving gas and oil exploration to the shale players and Saudi's.

The good news to me is the XOM's and CVX's are the low cost producers after the Saudi's.

Opec's emerging market members all have higher costs and even higher needed prices.

My bet is by this time next year, XOM and CVX will be up 25%-50%,and sporting excellent dividends - even if cut in half!

P.S. I talking my book here. <smile>

Bob

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To: richardred who wrote (5994)10/25/2020 10:49:24 AM
From: richardred
   of 6101
 
Another oil deal. Another one bites the dust. I like the Husky Energy name better than Cenovus. :+ ) , But they chose Cenovus upon completion.

Canada's Cenovus Energy to buy Husky Energy for $2.9 billion By Ann Maria Shibu, Reuters - 21 minutes ago

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To: richardred who wrote (5551)10/25/2020 8:48:40 PM
From: richardred
1 Recommendation   of 6101
 
It looks like potential food deals these days will entail the drive through.

Dunkin’ Brands discuss potential sale to Inspire Brands.
October 25, 2020

By Aishwarya Nair

(Reuters) – Dunkin’ Donuts and Baskin Robbins chains owner Dunkin’ Brands Group Inc <DNKN.O> has held preliminary discussions to be acquired by Inspire Brands, a private equity-backed restaurant company, Dunkin’ said in a statement on Sunday.

“There is no certainty that any agreement will be reached,” said Karen Raskopf, Chief Communications Officer of Dunkin’ Brands.

Dunkin’ declined to reveal further details.
The deal being discussed would take Dunkin’ Brands private at a price of $106.50 a share, said the New York Times which first reported the development.

Inspire Brands, the owner of Arby’s and Jimmy John’s, declined to comment when contacted by Reuters.

The announcement could be made public as soon as Monday, the New York Times said.

oann.com

Message 32341650

Message 31805979

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To: richardred who wrote (5990)10/27/2020 1:08:37 PM
From: richardred
   of 6101
 
A deal is reached.

AMD to buy chip peer Xilinx for $35 billion in data center push By Stephen Nellis, Reuters - 9:41 AM ET 10/27/2020

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To: richardred who wrote (5889)10/27/2020 1:11:17 PM
From: E_K_S
   of 6101
 
Smucker to sell Crisco unit to B&G Foods in $550M deal
Oct. 26, 2020 5:49 PM ET|About: The J. M. Smucker Company (SJM)|By: Carl Surran, SA News Editor

J.M. Smucker (NYSE: SJM) agrees to sell its Crisco oils and shortening business, including dedicated manufacturing and warehouse facilities located in Cincinnati, Ohio, to B&G Foods (NYSE: BGS) for $550M in cash.

BGS +6.1%, SJM +2% after-hours.

The business generated $270M in net sales for Smuckers' FY 2020 ended April 30.

Smucker says the Crisco divestiture aligns with its plan to exit the U.S. baking category and focus more of its resources on its core growth platforms of pet food, coffee and snacking.

The company expects the divestiture to be dilutive to full-year adjusted earnings by $0.45-$0.55/share, reflecting the foregone profit related to the oils and shortening business.

In a bullish analysis on B&G Foods posted earlier today on Seeking Alpha, Carles Diaz Caron cites rapidly rising sales and declining net debt as well as a safe dividend.

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To: E_K_S who wrote (5999)10/27/2020 1:42:53 PM
From: richardred
1 Recommendation   of 6101
 
I saw that one. The market likes the deal. I like that word accretive to earnings. This deal looks big enough it could move the needle in earnings.

Baking is in season in this pandemic. It sure looks like the deal makes a good compliment and makes BGS a bigger force in baking. Looks like the deal will hurt SJM earnings. Like selling Pirates Booty hurt BGS earnings.

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To: richardred who wrote (6000)10/27/2020 3:14:02 PM
From: E_K_S
1 Recommendation   of 6101
 
You watch a company long enough, you understand management and if they are growing the company as they say and doing it from FCF and paying down debt vs other who just leverage their bets.

I like the former but hard to find a CEO w/ such history. Even on many of the deals you post, an investor must dig deeper to see their history and if it complements your own investment thesis.

I like growth but not at any price or by taking on too much debt. SJM (I own a few shares) is going to more growth. I own 10x more BGS because I like dividends and excess FCF that can be used to pay down debt and/or finance accretive acquisitions. Food stocks can be boring but for me, good hold as they grow the business organically and continue to generate all that FCF.

EKS

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From: E_K_S10/27/2020 4:49:13 PM
   of 6101
 
Why B&G Foods Is Buying the Crisco Brand and What It Might Mean for the Stock -- Barrons.com

Why B&G Foods Is Buying the Crisco Brand and What It Might Mean for the Stock -- Barrons.com

Dow Jones

By Teresa Rivas

B&G Foods said Tuesday it is buying the Crisco brand from J.M. Smucker, sending its shares higher in midday trading.

B&G (ticker: BGS) said it would acquire the oil and shortening business for $550 million in cash, in a deal that is slated to close next year.

The deal will bring Crisco into a portfolio that already includes some cooking and baking products. B&G may be best known for its frozen-food business -- its Green Giant vegetable brand accounted for nearly 22% of its sales in 2019 -- but it also owns Baker's Joy nonstick baking spray and Clabber Girl baking powder. Crisco is the leading brand of both shortening and vegetable oil, B&G noted in the news release.

Cooking and baking products have gotten a lift from the Covid-19 pandemic, with people spending more time at home and experimenting with new foods as they look to save money and eat healthier.

B&G stock was up 4.1% to $29.04, while J.M. Smucker (SJM) was off 0.9% to $114.05. The Dow Jones Industrial Average was down 0.4%.

Some analysts are upbeat about the deal. Piper Sandler's Michael Lavery, who has an Overweight rating on the shares, thinks the purchase "looks highly accretive...[as] Crisco can help build B&G's scale in baking products," and could lift the company's earnings per share by 50 cents to 55 cents in 2021.

RBC Capital Markets' Nik Modi has a Sector Perform rating on B&G but lifted his price target to $32 from $30, citing the acquisition. He views it as a positive, "leaning in to expectations at home food trends will remain elevated in a post-Covid world."

Credit Suisse's Robert Moskow, however, took a more-measured approach. He lifted his price target by $1, to $28, and wrote that Crisco is a good fit for B&G's portfolio. However, he reiterated a Neutral rating. He thinks consumers will continue to cook and bake more at home, even post-pandemic, but warned that Crisco was experiencing steady declines before Covid, "from consumers shifting to healthier oils and private label."

"Of the companies geared toward at-home food consumption, we prefer the ones with strong brand equity and a good track record for reinvesting behind them," he wrote, citing McCormick (MKC) and General Mills (GIS).

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