Companies with cash-rich balance sheets should really consider a mergers and acquisitions, Jim Cramer said Monday on CNBC's "Mad Money," pointing to three recent transactions that resulted in unusual, albeit positive, movement for acquirer's stock.
Last week, shares of Gannett surged after the largest U.S. newspaper chain announced a $1.5 billion deal to purchase television company Belo. Gannett bought Belo for a 28 percent premium and naturally, the TV company's stock spiked. Gannett itself jumped 34 percent on the day the deal was announced.
Generic drug maker Actavis intends to buy specialty pharmaceutical company Warner Chilcott for $5 billion in stock in an effort to expand its branded drug portfolio, lower taxes and increase profits. Shortly after the announcement late last month, Actavis' stock rose from $105 to $119, a 13 percent move, even as it had already been climbing on the prospect of a deal.
Food maker B&G Foods will acquire Robert's American Gourmet Food, which owns the Pirate's Booty brand, for $195 million in cash. Shares of B&G immediately jumped from $29 to $31, a 2 percent move, on the news. Since the announcement last week, the stock has continued to climb to $33 a share.