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The maker of Oreo cookies and Cadbury chocolates,
Mondelez International, Inc. ( MDLZ - Analyst Report) recently announced that it is offering notes worth $1 billion. The company offered 6.500% Notes due 2040, 7.000% Notes due 2037, 6.875% Notes due 2038, 6.875% Notes due 2039 and 6.500% Notes due 2031. The offer is valid till Feb 6, 2014, unless further extended by the company.
Mondelez has been in news since Dec 2013 when it increased its share buyback program by a massive $1.7 billion. The total share repurchase authorization is now worth $7.7 billion which can be repurchased by 2016.
The buybacks will be funded by the net proceeds of the arbitration award that Starbucks Corporation ( SBUX - Analyst Report) will pay under a dispute settlement announced in Nov 2013. Starbucks will pay $2.76 billion to Kraft Foods Inc. against the settlement of the year-long distribution agreement dispute.
Mondelez will receive the indemnity as Kraft Foods was split into two separate companies — Mondelez and Kraft Foods Group, Inc. — in Oct 2012. While Mondelez took old Kraft’s food and snacks business, Kraft Foods Group got the North American grocery business.
Mondelez carries a Zacks Rank #2 (Buy). However, ever since the split from Kraft, Mondelez has been under pressure and posted disappointing results.
In Nov 2013, Mondelez reported dismal third-quarter 2013 results, managing to meet the Zacks Consensus Estimate for earnings but missing the same for revenues due to weak performance in China. The company also lowered its organic revenue guidance for 2013 as the present headwinds are expected to continue.
Another stock worth considering in the food/beverage industry is ConAgra Foods, Inc. ( CAG - Analyst Report) , carrying a Zacks Rank #2.
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