CHICAGO, April 22 Smithfield Foods Inc's
SFD.N shares rose as much as 9 percent on Wednesday amid
rumors that the company may be the target of a takeover by
Chinese agriculture company COFCO.
The rumors had COFCO, China's largest national agricultural
trading and processing company, offering $17 per share for
Smithfield, traders and analysts said. COFCO bought about 5
percent of Smithfield's common stock a year ago.
Smithfield denied the rumors. "COFCO is not offering to buy
out Smithfield at $17 per share," it said in an email.
Smithfield Foods is the largest U.S. hog and pork
"Smithfield Foods calls active on renewed takeover
chatter," said Paul Foster, options strategist at Web
information site theflyonthewall.com.
Smithfield shares jumped more than 9 percent to $10.82
early on Wednesday before closing up 4.34 percent at $10.33, in
"If the market believed in it, the stock would have been at
$17," said one analyst, who downplayed the rumor.
In the options market, investors scooped up Smithfield's
call options, which give buying rights to the underlying stock,
hoping that shares would extend their gains, analysts said.
In all, about 29,000 calls and 1,627 puts changed hands, 20
times the usual volume, according to option analytics firm
(Reporting by Bob Burgdorfer; Editing by Gary Hill)