Bob Evans Farms Inc (NASDAQ: BOBE) shares are likely to soar Tuesday, on word it is being purchased by Post Holdings Inc. (NYSE: POST) for $77.00 per share. The equity value of the transaction is about $1.5 billion.
Early reports say the price represents a 15% premium on the 30-day volume weighted average price of Bob Evans shares. Post expects to finance the purchase with cash on hand and through borrowings under Post's existing revolving credit facility
The transaction, which needs director approval by both companies, is expected to be completed early in calendar 2018, Post's second quarter of fiscal year 2018, subject to customary closing conditions including the expiration of waiting periods under U.S. antitrust laws and approval of Bob Evans' stockholders.
Post affirmed its fiscal 2017 Adjusted EBITDA guidance range of $975 million-$990 million, inclusive of Weetabix's contribution for the fourth quarter.
Bob Evans makes refrigerated potato, pasta and frozen convenience food items under a number of brands other than Bob Evans, such as Owens, Country Creek and Pineland Farms. Bob Evans, founded in 1948, also has a foodservice business that sells products including sausage, sausage gravy, breakfast sandwiches and side dishes. It sold its restaurant chain to Golden Gate Capital in April.
Post Holdings makes cereals, including Fruity Pebbles, Honey Bunches of Oats and others
Bob Evans shares were lifted $4.08, or 5.6%, to $77.01, while shares in Post declined 21 cents to $85.63.
