M&A Buzz Boosts Andersons Inc (ANDE) and Church & Dwight Co., Inc. (CHD)

M&A buzz is helping Andersons Inc (NASDAQ:ANDE) and Church & Dwight Co., Inc. (NYSE:CHD) trade higher today

by Josh Selway

Published on May 18, 2016 at 11:46 AM

There's been plenty of action on the M&A front this month, and that's continuing today. Agribusiness Andersons Inc (NASDAQ:ANDE) and consumer goods manufacturer Church & Dwight Co., Inc. (NYSE:CHD) are both trading higher thanks to takeover chatter. Let's take a closer look at today's news on ANDE and CHD stocks. 

ANDE is rallying today -- a rare occurrence -- on news the company rejected a two unsolicited bids from HC2 Holdings Inc (NYSEMKT:HCHC). The Andersons' board "unanimously determined that both of HC2's proposals" -- the most recent of which was $1 billion, or $37 per share -- "undervalue" the company, and "represent an opportunistic attempt to acquire the company at a low point in the industry cycle." With the stock up 34.7% at $34.95, ANDE is looking at its best close since early December. 

This pop is horrible news for ANDE short sellers. Though short interest represents just 5.5% of the stock's float, it would take these bears nine days to cover their positions, at ANDE's average daily volume. Analysts are also bearish, with 75% calling ANDE a "hold." 

CHD has gained 2% to sit at $97.51, earlier touching a record high of $99.25, thanks to rumblings of buyout interest from consumer goods heavyweight Procter & Gamble Co (NYSE:PG)​. This positive performance is nothing new for CHD, as the shares have been in an impressively steady multi-year uptrend. 

Options traders have certainly taken notice, with CHD calls trading at 21 times the intraday norm today. It's possible traders are buying to open the July 105 call, possibly betting on a bid north of $105 per share from PG. 

Elsewhere, CHD sports elevated short-interest levels. At the stock's average pace of trading, it'd take shorts two weeks to cover their positions. And analysts are also surprisingly downbeat. Ten of the 15 analysts covering Church & Dwight Co., Inc. (NYSE:CHD) say it's a "hold," "sell," or "strong sell." 

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