Sarah Wasserman (swasserman@sir-inc.com) Del Monte Foods Company (DLM) touched a new all-time high of $17.72 today, as the stock rallied on M&A news. Specifically, it was reported that global asset firm KKR & Co. L.P. (KKR) is looking to acquire DLM, with rumors swirling that the deal could value Del Monte for as much as $18.50 per share. According to the reports, KKR and DLM are trying to close the deal before the food producer releases earnings on Dec. 2.
Option players have jumped on the news, with volume soaring to 27 times the daily norm on DLM, with roughly 20,000 contracts changing hands so far. Call have made up the majority of today's volume, with some 12,000 contracts exchanged.
DLM's December 15 call has been a popular choice today, with over 2,600 contracts changing hands at this strike -- 72% of which traded at the bid price, indicating they were likely sold. Given DLM's rally today, these 15-strike calls are now comfortably in the money, and may have been liquidated by option traders collecting profit on their positions.
With less than an hour until the close, DLM was sitting right at $17.50.
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