Why TreeHouse Foods Stock Climbed Today
Key Points
TreeHouse Foods agreed to a takeover offer from a European investment firm.
The purchase price represents a sizable premium to the stock's recent value.
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Shares of TreeHouse Foods (NYSE: THS) surged more than 22% on Monday after the maker of private-label packaged goods struck a deal to be acquired for $2.9 billion.
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TreeHouse Foods is being taken private
Under the terms of the deal, private equity firm Industrial F&B Investments would purchase TreeHouse for $22.50 per share in cash. The offer represents a 38% premium to the stock's closing price on Sep. 26, the last day before rumors of a potential takeover began circulating.
TreeHouse stockholders would also receive one non-transferable contingent value right for each share held, which could provide additional compensation to holders from the potential proceeds of ongoing litigation. In 2014, TreeHouse filed an antitrust lawsuit against Keurig Green Mountain, now a subsidiary of Keurig Dr. Pepper, alleging that the company had monopolized markets for single-serve coffee brewers and pods. TreeHouse is seeking estimated monetary damages that could exceed $1.8 billion.
TreeHouse Foods' leadership believes the buyout is a good deal for investors
"Today's agreement with Investindustrial follows careful consideration by our board to determine the best path to maximize value for shareholders," Linda Massman, lead independent director of TreeHouse's board of directors, said in a press release. "We are pleased to have reached an agreement that will deliver compelling, cash value for our shareholders."
The transaction is expected to close in the first quarter of 2026, subject to regulatory and stockowner approval.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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