P&G, Newell Rubbermaid Takeover Talks are Reported
P&G, Newell Rubbermaid Takeover Talks are Reported
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P&G, Newell Rubbermaid Takeover Talks are Reported
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According to an article in Businessweek, trading of Newell Rubbermaid Inc. options surged to the highest in almost three months on speculation of a takeover by the Procter & Gamble Company (P&G).
The article states that almost 14,000 calls to buy the stock changed hands, 10 times the four-week average and 11 times the number of puts, which give the right to sell. The most-active contracts were June $17.50 calls, which rose 60 percent to 40 cents and accounted for more than half of all options volume for Atlanta-based Newell Rubbermaid. Those contracts expire June 18. "There's an unsubstantiated rumor that Newell may be taken over by Procter & Gamble," says Patrick Mortimer, director of options trading at Pipeline Trading Systems LLC in New Hope, Pa. "That could drive the trading in options." Rotha Penn, a spokeswoman for P&G, said the company doesn't comment on rumors about acquisitions or divestitures, but she did offer the following statement: "Managing the product portfolio is an ongoing process. Procter & Gamble management and the board regularly review the portfolio to ensure the businesses are capable of meeting our shareholder value creation expectations." Newell Rubbermaid declined to comment. This isn't the first time rumors have swirled around the possible combination of these two consumer goods giants. On Jan. 20, 2010, Bizjournal reported that P&G shares were down, as were Newell Rubbermaid's to a lesser extent, following reports that P&G might be looking to acquire the maker of Sharpie markers, Rubbermaid containers and other branded consumer products. The rumors did not prove true then. Only time will tell if they come to fruition this time around. |
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