Why Zhongpin Shares Jumped

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Chinese food supplier Zhongpin (Nasdaq: HOGS  ) jumped as much as 17% today on news that it agreed to a merger with privately held Golden Bridge Holdings, which will value the shares at $13.50.

So what: The decision effectively means that Zhongpin is being taken private by its chairman and CEO, Xianfu Zhu, and his partners, who already own 26% of the company. Zhongpin's board of directors approved the deal and have recommended that shareholders accept the agreement. Zhongpin sells pork products and other foods at 3,400 retail locations in China.

Now what: it's hard to argue with a jump in the stock on a buyout offer, especially when shares are still trading under the $13.50 premium. However, one law firm has already announced a suit over breach of fiduciary duty, stating that, among other matters, the book value of Zhongpin shares are $14.29, so this may be not yet be a done deal. The agreement with Golden Bridge values the publicly held shares of Zhongpin at $418 million. With the growing middle class in China, the pork processor figures to be a valuable enterprise. Either way, this looks like a win for shareholders.

Don't miss the latest news on this company before it goes private. Add Zhongpin to My Watchlist.

Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 27, 2012, at 12:23 PM, EvanBuck wrote:

    The Chinese citizenry is demanding more pork sandwiches. *Cue green thumbs on this stock* :P

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2127403, ~/Articles/ArticleHandler.aspx, 10/22/2016 11:36:15 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
HOGS.DL $0.00 Down +0.00 +0.00%
Zhongpin CAPS Rating: **