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Diamond Foods, the listed California packaged nut company, has hired Lehman Brothers to conduct an auction, according to a banker and a private equity source, both claiming knowledge of the situation.
Diamond executives and Lehman officials didn’t return calls.
The sale process is at an early stage, according to the private equity source.
A number of strategic buyers may be interested in Diamond, including Kraft Foods, which owns the Planters brand; Ralcorp and John B San Fillippo & Sons, a listed Illinois nut and snack food company, said one industry banker, who was unaware of the sale process.
An industry executive said that J M Smucker Co and Blue Diamond Growers, a private cooperative of almond farmers, may be interested in Diamond.
Blue Diamond Growers tried unsuccessfully to expand its offerings beyond almonds and since Diamond, an unrelated company, has a full range of nuts, it might be of interest to them, the executive added.
J M Smucker may be interested because it’s launching a line of snack nuts. It is test-marketing a line of snack nuts under the Jif name, a spokesperson for J M Smucker said.
John B San Fillippo & Sons is unlikely to be interested in Diamond because the company, which has a market cap of USD 100mn, probably wouldn’t be able to afford Diamond, the executive added.
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