Kellogg Company (NYSE:K): Can History Be Repeated?

Posted on Apr 4 2014 - 9:05am by Brendan Byrne

Boston, MA 04/04/2014 (wallstreetpr) - Kellogg Company (NYSE:K) is a maker of snacks and ready-to-eat cereals. Shares of the company jumped the most since 2009, five years down the line, during trading Thursday. The amount of contracts which changed hands during trading yesterday ended up signaling possible takeover in the company.

There are no particular names of companies which have step forward with interest to take over Kellogg, yet, if history is anything to go by, the kind of contract activity witnessed in the stock in the last session mirrors activities which preceded previous takeovers.

A case in point is the purchase of HJ Heinz Co. by Berkshire Hathaway Inc.  Analysts identified that the sort of trading in Kellogg Company (NYSE:K) resemble the kind of activity just a day before the Warren Buffet-controlled company reached out to takeover HJ Heinz.

Big value may deter acquirers

Unlike the acquisition of HJ Heinz which involved just about $8 billion, the $23.8 billion market value of Kellogg might come as a deterrent for a takeover, save for the bigger buyers. Moreover, analysts also agree that huge contract activities never always lead to takeover deals. A case in point is Campbell Soup Co. which recorded spectacular contract activity but has merely remained soaked in takeover speculations without a deal showing several months since December.

Investors bank on a deal

The big jump of shares in the last session leaves no doubt that investors are training their eyes on possible takeover. That move should result in value gain for those holding the stock. But also, as takeover speculation remains, shorts are able to make a kill from price volatility. Therefore, as things stand right now for Kellogg Company (NYSE:K), whatever directions things move, shorts and longs believe that there is an opportunity to make money with the stock.

Kellogg Company (NYSE:K) was founded about 100 years ago, and witnessed its IPO in 1952.

While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. You may contact Brendan via his email (brendanbyrne@wallstreetpr.com) or his Google+ page (https://plus.google.com/u/0/116608759701551457422).

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