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: Shares of Beam (UNKNOWN:BEAM.DL) were catching a buzz today, jumping as much 25% after the sprits-maker agreed to be bought by Suntory for $13.62 billion.
So what: The maker of whiskeys including Jim Beam, Maker's Mark, and other liquors said it would sell itself to the Japanese alcohol giant Suntory for $83.50 a share. The deal will create the world's third largest premium spirits producer, with a particularly strong portfolio in the fast-growing whiskey category. Shares of Beam peaked at $83.61 today and closed at $83.42, indicating a high level of confidence that the deal will go through at the agreed-upon price. The transaction was unanimously approved by each company's board of directors and is expected to close in the second quarter this year, but Beam's stockholders and regulatory agencies must still approve it.
Now what: At a 25% premium above the stock's price, the deal seems like an excellent one for Beam shareholders. Shares hit their highest point on the news since 2005, when the stock briefly peaked above $90, and have now more than tripled since their 2009-recession low. Commenting on the agreement, Beam CEO Matt Shattock called it "a very exciting opportunity that delivers substantial value for our stockholders and creates an even stronger global company with an excellent platform for future growth." I'd tend to agree with that statement and expect shareholders to overwhelmingly approve the acquisition.