Monday, February 27, 2006

Just bought some Heinz stock...

...because their tomato soup is REALLY good. Oh, and because I think its
an ideal LBO candidate. The stock has risen about 10% this month on
these rumours, and also credit spreads on Heinz have risen from about
20bps to 50bps (thats in the credit default swap market). However, even
following this rise, the market cap is only around $12bn, a prime price
for private equity interest (lets call it $15-17bn by the time the pay a
premium for the stock). Combine that with a well recognised brand, and a
business with relatively stable cashflows and it becomes even more
compelling.

I bought £5 per point (cent) at $37.95 for the Jun '06 contract (so just
under £20,000 worth of stock equivalent). Lets aim for a 10% rise before
reviewing it, and cross our fingers for $50 take-out by private equity!

2 Comments:

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17 May, 2006 12:45  
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17 May, 2006 12:48  

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