Image source: Synutra.
Continue Reading Below
Synutra International, Inc. (NASDAQ: SYUT), the Chinese company that makes baby formula and other supplements, announced on Thursday after the market closed that the company is going private in an equity buyout. Shares are up more than 17% Friday as of 11 a.m. EST on the news.
In the company's official release about the buyout offer fromBeams Power Investment Limited and acceptance by Synutra's board, it announced that shareholders will receive$6.05in cash for each share outstanding. Shares are currently trading around $5.30. This discrepancy is likely because the deal still needs stockholder approval and to meet certain regulatory requirements.
The baby food market in China is likely to boom in coming months and years as the Chinese government announced a year ago that the infamous one child policy will be phased out. Even though Synutra was one of the purest plays in this growing market, there are others.Mead Johnson Nutrition Co.(NYSE: MJN), the pediatric nutrition company that makes the baby food brandEnfamil, gets a sizable chunk of its sales from China. Baby formula is also an important segment for food giants likeNestle(NASDAQOTH: NSRGY), which counts China as a growth market for its brands.
10 stocks we like better than Synutra International, Inc. When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Synutra International, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of November 7, 2016
Seth McNew has no position in any stocks mentioned. The Motley Fool recommends Nestle. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.