| BUSINESSWEEK ONLINE : MARCH 1, 1999 ISSUE | ||||||||
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| INSIDE WALL STREET
Heinz: Europeans May Gobble It Up Ketchup king H.J. Heinz (HNZ) (HNZ) is back in the rumor mill: Whispers that the Pittsburgh company may be a takeover target have reignited interest in the stock, which has jumped from 50 to more than 55 in a week. A European conglomerate that makes consumer goods, including food, detergent, and personal-care prod- ucts, is said to be holding informal talks with Heinz. One New York money manager who has been accumulating shares says Heinz is worth 70 to 75 in a buyout. Heinz spokesman Ted Smith says it is company policy not to comment onmarketrumors. Heinz is in the midst of a cost-cutting drive aimed at saving $200 million a year, leading to growth in earnings per share of 10% to 12%. Even the bulls on Heinz worried that the company was ''cost-heavy'' compared with its peers, with below-average gross margins. Heinz has also announced it will sell its Weight Watchers International unit. ''Some of its operating units have questionable growth prospects and unclear strategic importance,'' says Terry Bivens, a food analyst at Bear Stearns. Bivens has a buy rating on the stock, based on the belief that CEO Bill Johnson ''will succeed in plans to spur better growth and propel Heinz into the top tier of U.S. packaged-food companies.'' Bivens figures Heinz will earn $2.40 a share for the year ending on Apr. 30, 1999, up from last year's $2.17. BY GENE G. MARCIAL _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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