What happened

Shares of packaging products-maker Bemis Company (NYSE:BMS) rose steadily in Thursday trading, punctuated by a sharp spike at 3:23 p.m.  when Bloomberg  finally revealed what was up. To wit: Bemis' Swiss-headquartered, Australian-listed rival Amcor Ltd. is apparently preparing to make a takeover bid.

So what

Now, there may be something to this rumor -- or there may be nothing. As Bloomberg noted in its report, "considerations are at an early stage" right now, and it's "unclear" whether Amcor has actually made an offer.

That said, Bemis does look vulnerable to a takeout bid. Over the past year, its shares have lost 18% of their value, hurt, among other things, by a big earnings miss in July. The S&P 500, by contrast, has surged upward by 13% over the same period. Bemis' stock price underperformance could make shareholders receptive to an offer by Amcor that bails them out of their mistake.

Wall mural shows big fish swallowing little fish

Bemis could be about to get eaten. Image source: Getty Images.

Now what

There's no guarantee Amcor's offer will be generous enough to erase Bemis' poor performance over the past year. Indeed, there's no guarantee that there's anything to this rumor at all, and that an offer will be forthcoming.

Worst case, investors who buy Bemis in anticipation of a buyout may get stuck owning a stock that's selling for a below-market-average 21 times earnings and paying a very respectable 2.8% dividend yield, for a company expected to grow earnings 15% next year. I can think of worse "mistakes" one could make.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.