Reuters - Video

EDITION: U.S. | U.K. | IN

Business

Breakingviews: Rising dough

Wednesday, February 12, 2014 - 02:22

Feb. 12 - Rob Cox and Robert Cyran discuss whether investors should get excited about Mexican breadmaker Grupo Bimbo’s $1.8 bln deal to buy Canada Bread.

▲ Hide Transcript

View Transcript

So we're going to be talking about bread lots of bread Mexican bread Canadian bred. We got to deal today one point eight billion dollar deal Grupo bimbo the best named company in North America if a moral. Went out for an and is buying Canada bread the worst named company -- there's some interesting arbitrage going on here yeah I would think not not just our -- in the name -- -- and science terms because. Bimbo mean every expert about the Mexican stock market it's right up quite a bit of -- and doubled in the past years. And bimbos Ghana and acquired a lot of companies -- partly clearly is stuff I tried to bite hostess at but. Bunch of stuff right yeah and in North American bakery and the reason it's doing is because -- trade that pretty nice multiple 26 times earnings. Six cents earnings for bread operating company because it's an emerging market where people creating one program and that they they get when -- -- round. They go to Canada and this -- -- companies it is still on the ground for five years. They can by the company intuit acquisition premium about twenty times earnings so what that what that does as investors like -- 30% you know that they're basically they trade 30%. -- -- -- Premium gets to the act but of course also buying. Okay it may be slow growth but it's probably pretty steady. The fact you almost wonder why they were able to get this rather than private equity guy but but that's because the price has. But the but the other point you then of course diversify into stable -- -- develop. Cassie your your weighted average cost capital was it about -- does have. Quite a few crises over the past bright -- twenty years that some expenses and other acquisitive company got troubles and so far. In this case however if they stay in business. It's not taking the debt hasn't grown hugely mountain for some accident that I think that it just hasn't sent actually spread the -- spanning across north now. America the North American Free Trade Agreement -- makes it easier and you're getting a few probably getting no other financing and yet there any synergies that just created top right here maybe they can get some. Introduce a Mexican Britain Canada you know convinced that he -- or something or maybe they start exporting from across the border. OK well thank you very much we'll look for your story will be back -- more breaking news tomorrow.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

Breakingviews: Rising dough

Wednesday, February 12, 2014 - 02:22

Top News »

Investing 201 »

Arian Foster = BlackBerry? Arian Foster = BlackBerry?

Fri, Oct 25, 2013 - (3:16)

Don’t miss these red flags for IPOs Don’t miss these red flags for IPOs

Thu, Oct 10, 2013 - (2:34)

Copycat currency trading Copycat currency trading

Wed, Oct 02, 2013 - (2:28)

When to dump a winner When to dump a winner

Tue, Sep 24, 2013 - (1:55)

Where gold might again attract Jim Rogers Where gold might again attract Jim Rogers

Thu, Sep 19, 2013 - (2:05)

Why savings interest rates won't budge Why savings interest rates won't budge

Fri, Sep 13, 2013 - (2:09)

Buy local? ETFs try the trend Buy local? ETFs try the trend

Thu, Sep 05, 2013 - (2:42)

The better bond funds The better bond funds

Wed, Aug 07, 2013 - (2:40)

Best bargain in 40 years? European stocks Best bargain in 40 years? European stocks

Thu, Aug 01, 2013 - (2:24)

Invest like an activist Invest like an activist

Fri, Jul 26, 2013 - (2:49)

Money Clip »

3 things to do before disaster strikes 3 things to do before disaster strikes

Wed, Sep 18, 2013 - (1:39)

Your must-do money list Your must-do money list

Wed, Sep 11, 2013 - (1:24)

The worst "best" financial advice The worst "best" financial advice

Wed, Sep 04, 2013 - (1:42)

Forget gold: The case for REITs Forget gold: The case for REITs

Fri, Apr 26, 2013 - (1:19)

3 rules for buying a house now 3 rules for buying a house now

Thu, Apr 18, 2013 - (1:39)

“Stalking” your dream home - Money Clip “Stalking” your dream home - Money Clip

Wed, Mar 27, 2013 - (2:50)

3 hidden tax deductions - Money Clip 3 hidden tax deductions - Money Clip

Thu, Mar 21, 2013 - (1:33)

Moving Pictures »

Still missing – MH370 Still missing – MH370

Fri, Sep 05, 2014 - (2:05)

Images of August Images of August

Fri, Aug 29, 2014 - (1:00)

Burning Together Burning Together

Mon, Sep 01, 2014 - (2:23)

Mending dolls, teddies and hearts Mending dolls, teddies and hearts

Fri, Aug 22, 2014 - (3:12)

"Old timers" sail the Chesapeake Bay "Old timers" sail the Chesapeake Bay

Mon, Aug 11, 2014 - (2:27)

Burned memories Burned memories

Fri, Aug 08, 2014 - (3:02)

Images of July Images of July

Thu, Jul 31, 2014 - (1:20)

World Cup: passion on the pitch World Cup: passion on the pitch

Fri, Jul 11, 2014 - (1:00)

A refugee in America gives back A refugee in America gives back

Thu, Jul 03, 2014 - (3:25)

A long search for refuge A long search for refuge

Fri, Jun 20, 2014 - (3:04)

Reuters Investigates »

Re-homing victim: "I could have been dead" Re-homing victim: "I could have been dead"

Wed, Feb 19, 2014 - (8:24)

Cops and loggers in the Amazon rainforest Cops and loggers in the Amazon rainforest

Fri, Jan 10, 2014 - (4:01)

"Passed around like a dog" "Passed around like a dog"

Thu, Aug 29, 2013 - (6:32)

Adopted, then abandoned online Adopted, then abandoned online

Thu, Aug 29, 2013 - (13:21)

How the DEA keeps its secrets secret How the DEA keeps its secrets secret

Mon, Aug 05, 2013 - (1:36)

How education lost its role as the great equalizer - Reuters Investigates How education lost its role as the great...

Mon, Dec 17, 2012 - (7:52)

Jihad Jane: From abused child to American jihadist - Reuters Investigates Jihad Jane: From abused child to American...

Sat, Dec 08, 2012 - (10:01)

Jihad Jane: The order to kill - Reuters Investigates Jihad Jane: The order to kill - Reuters...

Sun, Dec 09, 2012 - (10:39)