Stock of PinguinLutosa NV, the Belgian producer of frozen vegetables, rose the most in more than eight years in Brussels trading after the company said its board agreed in principle to sell its Lutosa potato division for 225 million euros ($284 million), according to Business Week.
Shares rose as much as 3.05 euros, or 32%, to 12.50 euros, the biggest intraday percentage gain since August 2004. The stock traded at 11.74 euros, or 24% higher, at 10:31 a.m. local time. What was then called just Pinguin adopted a joint name and even joint logos after acquiring Lutosa in 2007 for175 million euros in cash.
The Westrozebeke-based company expects to sign the final sale agreement by the end of the month and complete the transaction by year end, subject to due diligence, antitrust approval and acceptance by the buyer, according to an e-mailed statement from PinguinLutosa. The buyer's identity will be announced upon completion of the negotiations, the company said.
After the transaction, Pinguin without Lutosa will be net cash positive, wrote Guy Sips, an analyst at KBC Securities in Brussels, in a note Sept. 7 to investors. Business Week had already indicated the deal as a real game changer. Sips upgraded his recommendation on the stock to buy from accumulate and increased his price estimate to 16 euros from 9.80 euros.
