Shares of
Hostess Brands
jumped on Monday after it was announced that J.M. Smucker Co. will be acquiring the maker of Twinkies.
Smucker
(ticker: SJM), the food company famous for jams and jellies, reached an agreement to buy Hostess (TWNK) for about $5.6 billion, or $34.25 a share. That represents an approximate 54% premium to the stock’s closing price on Aug. 24, which was the last trading day before reports broke about the possibility of a deal.
Stockholders will receive $30 in cash and 0.03002 shares of Smucker common stock for each share of Hostess common stock they own.
“We believe this is the right partnership to accelerate growth and create meaningful value for consumers, customers and shareholders,” Andy Callahan, chief executive of Hostess, said in the news release.
Smucker beat out competition against
General Mills
(GIS), the maker of Cheerios, to buy out Hostess (TWNK) for, The Wall Street Journal reported over the weekend.
Hostess surged 17% in premarket trading Monday to $32.85. Smucker shares dropped 9.3% to $128.44.
This deal could mark a dramatic recovery for Hostess, which has been through two Chapter 11 bankruptcies. The company returned to the stock market in 2016 after going private. Sales stopped $1.3 billion in 2022 and the stock price has more than doubled in the past five years.
Write to Brian Swint at [email protected]
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