Kellanova may be worth $108 a share in takeover – analyst

Kellanova (NYSE:K) may be valued at $108 in a potential takeover after reports that Mars was in talks for a deal, according to an RBC analyst. Kellanova shares rose 15%.

Based on a list of comparable deals over the past ~10 years in the snacking space, an EV/EBITDA takeout multiple is ~18x, RBC analyst Nik Modi wrote in a note on Monday.

RBC raised its price target and rating on Kellanova (K) to outperform from market perform earlier Monday to reflect the “high” potential for a transaction with Mars. The Kellanova price target was raised to $76 from $62.

“This makes so much sense to us that we are taking up our price target to reflect high potential for a deal and upgrading K shares to Outperform,” Modi wrote. “Our channel work has suggested for some time that Mars has been looking to expand its snacking portfolio and this would give the company a snacking platform with a strong global salty snack brand in Pringles as well as more regional brands that have yet to be globalized.”

Kellanova (K) could also see interest from Hershey (HSY), Mondelez (MDLZ) and Pepsi (PEP), CNBC’s David Faber said earlier Monday.

A possible Kellanova (K) deal comes after Reuters reported in early May that TOMS Capital Investment Management had taken a “significant” stake in the U.S. multinational food manufacturer,