Blog: Dean BestTakeover talk about Mead Johnson resurfaces - again

Dean Best | 16 March 2016

Shares in Mead Johnson jumped in the US yesterday after a fresh wave of takeover speculation about the US infant formula producer.

Mead Johnson's stock closed up over 11% in New York after a financial blog claimed the company was working with banking advisers following expressions of interest in the business.

The Betaville blog said the Enfamil maker was in contact with Lazard after Nestle and Danone had lodged interest in the company.

The blog also claimed Danone was set to work with JP Morgan and BNP Paribas on a bid for Mead Johnson.

When contacted by just-food this afternoon, a Mead Johnson spokesperson said: "As a matter of policy, we do not comment on marketplace speculation or rumour."

A spokesperson for Nestle said: "We never comment on market rumours or speculation."

Of course, this is not the first time Mead Johnson has been the subject of takeover talk and it is therefore easy to feel a little bit weary (and wary) when new claims come around.

There was a flurry of speculation linking Danone to Mead Johnson in the autumn of 2014. At the time, analyst reaction to the prospect of Danone buying Mead Johnson was mixed. Some industry watchers questioned whether Danone could afford Mead Johnson without a rights issue and suggested the group should instead invest in smaller transactions (which it has done subsequently).

Next week, Danone CEO Emmanuel Faber will be among the executives presenting at the Consumer Analyst Group Europe investment conference in London.

At last year's event, with the link to Mead Johnson fresh in the mind of many in the market, Faber did not comment directly on Mead Johnson but insisted Danone did not need to make a "transformative" acquisition "to be successful".

Has this stance changed?

Danone had not responded to a request for comment at the time of writing.

However, Faber may provide some comment at next week's CAGE conference - to which you can register here.

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