Pinnacle Foods, the manufacturer of Mrs. Paul’s and Van de Kamp’s frozen seafood brands, may be up for sale - and Conagra Brands would be a likely buyer.
Investment fund Jana Partners, which recently bought a 9.5 percent stake in Pinnacle, is urging the manufacturer to explore a sale or another transaction, Bloomberg reported.
In a regulatory filing, Jana Partners said it believes Pinnacle should consider consolidating, since it has a strong position in the frozen foods industry.
Conagra, which Jana Partners is also invested in, is a likely buyer of Pinnacle, said David Palmer, analyst with RBC Capital Markets.
“We continue to believe that a Conagra Brands’ acquisition of Pinnacle Foods remains – along with Kraft Heinz buying Mondelez – among the most likely potential large-scale M&A events in U.S. food,” Palmer wrote in a note to clients, Bloomberg reported. “We believe U.S. frozen is ripe for consolidation.”
Combining Conagra and Pinnacle would create the highest gross margin and profit upside of any transaction in the space, according to Palmer.
Pinnacle’s board of directors and management welcome stockholder input and are committed to continuing to create value for all stockholders, the company told Bloomberg.
Jana Partners said it may discuss other issues with the Pinnacle, including operations, cost structure, and makeup of its board.
