P&G (PG) is considering giving up the sale of its Pringles crisps business to Diamond Foods Inc. (DMND), as the Diamond Foods’ CEO and CFO are under financial investigations and suspended since February 8, the Diamond Foods stock price declined sharply yesterday. Read the post about Diamond Foods stock price in after-hours trading.
P&G agreed to sell Pringles at the price of $1.5 billion to Diamond Foods in April 2011 with the purpose of exiting the food field industry. Informed sources said that P&G has to decide how to terminate the transaction at this moment and consider whether Diamond will oppose the breach of contract. If the transaction moves forward, the P&G shareholders will hold the majority of stake in Diamond Foods.
P&G said previously that the transaction mainly depends on the results of the investigations on the Diamond Foods’ executives. The P&G spokesman Paul Fox said in an interview on February 8, that P&G had found the result was very disappointing, while Pringles has attracted the interest of other buyers and P&G is likely to give up the deal.
The Diamond Foods spokesman did not immediately response to this matter.