Colgate-Palmolive Stock Rises on Buyout Speculation

What happened

Shares of consumer-products company Colgate-Palmolive (NYSE: CL) increased as much as 7.4% on Wednesday on speculation thatKraft Heinz (NASDAQ: KHC)could acquire the company. Colgate stock finished the trading day up about 5.7%.

So what

Citing "a person claiming to have knowledge of the matter," StreetInsider reportedthat consumer food product company Kraft Heinz was "considering a takeover of Colgate-Palmolive."

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The buyout rumors come after Kraft Heinz withdrew its bid to buy Unilever. Kraft's recent interest in acquiring Unilever confirms the company's willingness to spend large sums on an acquisition and gives some substance to talk of a potential Colgate buyout.

Now what

Since neither company has released an official statement about the possibility of a Kraft Heinz takeover of Colgate-Palmolive, investors would be wise to refrain from giving the deal any weight in their analysis of either stock. However, investors may want to keep an eye out for comments from either company regarding this speculation.

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Daniel Sparks has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Unilever. The Motley Fool has a disclosure policy.