What Happened?
Shares of private label food company TreeHouse Foods (NYSE: THS) jumped 16.7% in the afternoon session after reports revealed that a private equity firm is considering a $3 billion bid to acquire the company.
The news, attributed to a LinkedIn post, suggests London-based Investindustrial is interested in taking the food processing company private. This acquisition offer is significantly higher than the company's current market value, triggering a strong rally as investors reacted positively to the potential buyout premium.
The shares closed the day at $19.45, up 19.3% from previous close.
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What Is The Market Telling Us
TreeHouse Foods’s shares are quite volatile and have had 19 moves greater than 5% over the last year. But moves this big are rare even for TreeHouse Foods and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 21 days ago when the stock dropped 2.9% on the news that it extended a decline that began after the company's second-quarter earnings report.
Despite TreeHouse Foods exceeding analysts' revenue and earnings per share (EPS) estimates for the quarter, the stock faced persistent selling pressure, falling 11.7% since the results were announced. This negative trend contrasts with the positive headline numbers, suggesting investors may have underlying concerns about the company's outlook.
TreeHouse Foods is down 44.2% since the beginning of the year, and at $19.45 per share, it is trading 53.9% below its 52-week high of $42.19 from October 2024. Investors who bought $1,000 worth of TreeHouse Foods’s shares 5 years ago would now be looking at an investment worth $483.95.
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