Dallas-based leading food and beverage company, Dean Foods Company (DF) recently announced the completion of its previously stated allocation of a portion of its remaining stake in The WhiteWave Foods Co. (WWAV) to its shareholders.
Dean Foods distributed 47,686,000 Class A shares and 67,914,000 Class B shares of WhiteWave on a pro rata basis on May 23 to shareholders of record as of May 17. Consequently, the company now has a minority stake in WhiteWave. Dean Foods, which currently carries a Zacks Rank #3 (Hold), appointed JPMorgan Chase & Company (JPM) as the financial advisor for this transaction, which had deemed it eligible as a tax-free distribution.
On the basis of Dean Foods’ outstanding number of shares as of May 17, its shareholders got 0.25544448 and 0.36380189 shares of WhiteWave’s Class A and Class B, respectively, for every share of the parent company held by them.
However, Dean Foods has not distributed the fractional shares of WhiteWave and has decided to sell them in the open market. The net proceeds from this transaction will later be distributed to shareholders of the company who were eligible for WhiteWave fractional shares.
Dean Foods, which competes with Lifeway Foods Inc. (LWAY), continues to retain the remaining 34,400,000 Class A shares or approximately 19.9% stake in WhiteWave, which will likely be distributed within the next 18 months in one or more tax-free transactions.
Formerly, WhiteWave was a wholly-owned subsidiary of Dean Foods. Last year, however, the latter opted for an Initial Public Offering (IPO) to separate the maker of Silk soy products and Horizon Organic dairy products. Following the completion of the IPO, Dean Foods held 80% controlling interest in WhiteWave.
We believe that these strategic moves will boost the company’s shareholder value and present growth opportunities for both Dean Foods and WhiteWave.
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