SuperValu Inc. (NYSE: SVU) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The company announced this morning that it would be acquired and that the acquisition will take place at an incredible premium. Of course, the news led to excitement among investors who are sending the stock on a run for the top. Today, we’ll talk about:
- The acquisition;
- what we’re seeing from SVU as a result of the news; and
- what we’ll be watching for ahead.
SVU Rockets On Acquisition News
As mentioned above, SuperValu is having an incredibly strong start to the trading session this morning after the company announced that it would be acquired. Early this morning, it was announced that United Natural Foods will be acquiring the company for about $2.9 billion. This figure includes debt and liabilities. In the release, SVU said that the deal is expected to close in the fourth quarter of 2018, but is still subject to customary closing conditions as well as reuglaotry approval.
The acquisition is a good deal for both companies. Not only will SVU and its investors get an incredible premium on the sale, and United Natural Foods brings in a great brand and line of products and locations to its large brand that has a footprint in distributing more than 110,000 products in more than 43,000 customer locations.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news causes moves. In the case of SuperValue, the news proved to be overwhelmingly positive. After all, an acquisition at a premium provides a nearly immediate return of value for investors. So, it’s no surprise that the stock is climbing dramatically in the market this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:46), SVU is trading at $32.03 per share after a gain of $12.59 per share or 64.76% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on SVU. In particular, we’re interested in following the story surrounding the acquisition of the company as the transaction is still subject to regulatory approval and customary closing conditions. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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