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Stock Markets Celebrate a Strong August; Nestle's Hungry for Aimmune as Utz Feeds IPO Investors

By Dan Caplinger - Updated Aug 31, 2020 at 5:10PM

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It was a mixed day for the markets.

Monday was a mixed day on Wall Street, as the Dow Jones Industrial Average (^DJI 0.11%) and S&P 500 (^GSPC 0.02%) lost ground despite another record showing for the Nasdaq Composite. Yet even with the losses for the day, the Dow and S&P were up around 8% in August, stringing another winning month in the amazing recovery from the coronavirus lows of March.

Today's stock market

Index

Percentage Change

Point Change

Dow

(0.78%)

(224)

S&P 500

(0.22%)

(8)

Nasdaq Composite

+0.68%

+80

Data source: Yahoo! Finance.

High-profile tech stocks have gotten the lion's share of investors' attention lately. There are other things happening with the market, though. Aimmune Therapeutics (AIMT) got a big boost from a high-profile buyout bid Monday, while snack-food seller Utz (NYSE: UTZ) enjoyed its first day of trading after formally merging with special purpose acquisition company (SPAC) Collier Creek Holdings (CCH).

Nestle makes an offer Aimmune can't refuse

Shares of Aimmune Therapeutics jumped more than 170% on Monday. The biotech company  behind a key treatment for peanut allergies got a lucrative buyout bid from Swiss food giant Nestle (NSRGY 0.25%).

Nestle will pay $2.6 billion to acquire Aimmune in full. Under the terms of the deal, Aimmune shareholders will receive $34.50 per share in cash for their stock. The buyout covers only about 74% of Aimmune's outstanding stock, because Nestle already owned more than a quarter of the biotech's shares.

Aimmune's Palforzia drug treats those suffering from peanut-related allergies, and it's the first such treatment to receive approval from the U.S. Food and Drug Administration. Nestle's press release announcing the deal notes that 240 million people suffer from food allergies, with peanut allergies being the most common.

Nestle executives are excited about the combination, noting that it brings together Nestle's already strong nutritional science unit and Aimmune's promising business. Long-time Aimmune investors might be disappointed that the buyout price is lower than where shares peaked in 2017, but it still represents a huge gain over recent stock prices.

Bowls of chips and pretzels.

Image source: Getty Images.

Investors have the munchies

Shares of Utz climbed 13% in their first day of trading under a new ticker symbol. The maker of snack foods completed its merger with a SPAC, coming public in a manner that has become more common lately.

Utz has been around for nearly 100 years, making pretzels, potato chips, tortilla chips, and a host of other popular snack foods. Even as a privately held company, Utz made a lot of progress in growing its brand.

Now, though, Utz has higher aspirations. With funding from capital markets, Utz aims to expand aggressively, going beyond its favored regional presence to build up a more nationally renowned stable of products. In particular, Utz is targeting Florida and Texas as key markets where it hasn't yet taken full advantage of opportunities for growth.

With the move, the stock no longer trades under its former CCH ticker symbol. Utz has satisfied customers for a century, and now, investors hope that UTZ will satisfy shareholders for decades to come.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends Nestle. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$32,840.26 (0.11%) $36.79
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,145.94 (0.02%) $0.75
Nestle S.A. Stock Quote
Nestle S.A.
NSRGY
$120.85 (0.25%) $0.30
Aimmune Therapeutics, Inc. Stock Quote
Aimmune Therapeutics, Inc.
AIMT
Collier Creek Holdings Stock Quote
Collier Creek Holdings
CCH

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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