Lamb Weston Holdings Sees Share Surge

Shares of Lamb Weston Holdings (NYSE:LW) experienced a surge of over 4% following reports from Reuters, indicating that Post Holdings (NYSE:POST) is considering a potential transaction with the company.

The news comes as Lamb Weston, a leading producer of frozen potato products, is under pressure from an activist investor to sell itself. Jana, controlling a 5% stake in Lamb Weston, has been advocating for the company's sale.

Post Holdings, known for its Grape Nuts cereal and Bob Evans mashed potatoes, has deemed Lamb Weston an appealing acquisition target since 2015, when Lamb Weston was still part of Conagra Brands (NYSE:CAG). With Lamb Weston now operating independently, Post Holdings is revisiting the idea of a purchase and is working with investment bankers to evaluate the potential deal.

The interest in Lamb Weston by Post Holdings, which has a market value of approximately $7 billion, aligns with the expected synergies that could result from such a combination. Lamb Weston, valued at about $10.5 billion, could offer considerable benefits to Post Holdings should a merger or acquisition occur.

While the discussions between the two companies are ongoing and details remain private, the potential transaction is already influencing market movements. Representatives from Post Holdings have opted not to comment on the matter, and a spokesperson for Lamb Weston was not immediately available for a statement.

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