Saturday, February 24, 2018

General Mills makes rich bid for pet food maker

General Mills has made a bid of close to $8 billion for Blue Buffalo Pet Products Inc.

The bid is so high that stock market analysts say it’s unlikely that there will be competing offers.

"In pet food, as in human food, consumers are seeking more natural and premium products," said General Mills chief executive officer Jeff Harkening.

General Mills is offering $40 per Blue Buffalo share, representing a premium of 17.2 percent to the pet food company's Thursday closing price.

"We like the strategic merit but the price is steep and General Mills will have to work hard to extract value from the deal," Jefferies analyst Akshay Jagdale said.

He wondered if General Mills could properly fold in Blue Buffalo after having difficulties in growing Yoplait, in which it acquired a majority stake in 2011.