Bellamy’s (BAL) shares spike on takeover

Stock

Bellamy’s Australia (BAL) $12.89 as at 16/09/2019

Event

Baby formula and organic food producer Bellamy’s has soared today on news the board has recommended a takeover offer from China Mengniu Dairy. The bid values Bellamy’s at $1.5b or $13.25 a share which was a 59% premium to last close.

In response, BAL shares are trading over 50% higher today which is around a 2.5% discount to the bid. Bellamy’s has had a bumpy ride over the past few years, and Mengniu have used this  to have a crack at the company. Bellamy’s does have a number of licences and approvals to sell its non-organic products into China, but has seen significant delays in receiving the same approvals for the organic versions.

Mengniu clearly sees this as a strategic opportunity, believing that they could fast track the approval process as well as leveraging their existing distribution channels to vastly improve sales for Bellamy’s. The BAL board agrees, and has unanimously recommended the offer.

Bellamy’s Australia (BAL) Chart

Bellamy's Australia Daily Chart

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