WEBVTT - Havens-Hasty: Prospects Are Good For WhiteWave-Danone (Audio)

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleventh, Ryo to Washington,

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<v Speaker 1>d C, Bloomber to Boston, Bloomberg twelve, UNDI to San Francisco,

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<v Speaker 1>Bloomberg to the Country series XAM doanal one and around

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<v Speaker 1>the globe the Bloomberg Radio plus Appen Bloomberg got gone.

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<v Speaker 1>This is taking stock French yogurt maker down, grappling with

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<v Speaker 1>a drop in dairy consumption around the world, taking a

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<v Speaker 1>big step into soy milk, protein shakes, kale and the

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<v Speaker 1>kicks starting growth. Will it work? We're going to take

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<v Speaker 1>a look at dons takeover of White Wave PIM. Yes,

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<v Speaker 1>White Wave Foods have formerly a subsidiary of Dean Foods

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<v Speaker 1>that was spun off in initial public offering in August

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<v Speaker 1>of twelve and today dan On and just say making

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<v Speaker 1>a ten billion dollar bid for White Wave Foods. Right now,

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<v Speaker 1>let's go to Charlie pellan In and I thank you PIM.

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<v Speaker 1>Thank you, Kathleen, she mentioned to the White Wave shares

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<v Speaker 1>there surging eighteen point five percent of eight seventy eight

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<v Speaker 1>Right now, fifty six twenty one ticker w w a

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<v Speaker 1>V stocks are lower, halting an advance in global equities

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<v Speaker 1>crewed down around forty five dollars of barrow right now

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<v Speaker 1>West Texas Intermediate forty five seventeen. It is lower by

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<v Speaker 1>four point eight percent. Brent crewed also lower by four

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<v Speaker 1>point eight percent. Treasury is falling with gold amid easing

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<v Speaker 1>demand for haven assets before tomorrow's payrolls report. Right now,

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<v Speaker 1>we've got the tenure down five thirty seconds. Deal there

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<v Speaker 1>one point three eight percent, Gold down five forty bounced.

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<v Speaker 1>It is down four tenths of one percent the thirteen

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<v Speaker 1>sixty one. Tony Quisenzi is portfolio manager at Pimco. He

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<v Speaker 1>spoke with Bloomberg Television this morning about Friday's jobs report

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<v Speaker 1>tomorrow and the job for the wage take here, it's expected,

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<v Speaker 1>carrencent the Bloomberg consensus to move to two point seven

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<v Speaker 1>percent year for here from two point five, which would

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<v Speaker 1>mark the highest rate since the two thousand nine, the

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<v Speaker 1>highest of the ex mention. That would be an indication

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<v Speaker 1>then that the labor market is getting tighter, that resource

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<v Speaker 1>utilization is moving up, the inflation eventually will move up

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<v Speaker 1>towards the FEZ two objective, and so to pay attention

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<v Speaker 1>to that. Yes, it is Thursday, but we did get

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<v Speaker 1>the ADP report today because of the holiday, ADP says

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<v Speaker 1>companies in June kept adding workers to US payrolls, private

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<v Speaker 1>payrolls climbing by a hundred and seventy two thousand last week.

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<v Speaker 1>Last month, I should say last week, the Labor Department

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<v Speaker 1>said claims dropped by sixteen thousand to two hundred fifty

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<v Speaker 1>four thousand, SMP down four to two thousand, ninety five,

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<v Speaker 1>a drop of two tenths of one percent. And now

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<v Speaker 1>let's take a look at other news from around the world.

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<v Speaker 1>Thank you, Charlie from the Bloomberg News room. I'm Jill Schneider.

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<v Speaker 1>The New York Times is reporting that Senator Bernie Sanders

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<v Speaker 1>is expected to endorse Hillary Clinton on Tuesday. That is

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<v Speaker 1>according to three party sources. FBI Director James Comey has

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<v Speaker 1>been in the hot seat today answering questions about the

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<v Speaker 1>investigation into Hillary Clinton's use of a private email server

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<v Speaker 1>and why he recommended no charges be filed. Comey denies

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<v Speaker 1>there was any bias behind the decision. Are folks did

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<v Speaker 1>it in a political and professional way, including our recommendation

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<v Speaker 1>as to the appropriate resolution of this case. Comey says

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<v Speaker 1>he found no evidence that Clinton knew that anything she

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<v Speaker 1>was doing was against the law. How Speaker Paul Ryan

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<v Speaker 1>is offering praise to Donald Trump after the likely GOP

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<v Speaker 1>presidential nominee met with more than two hundred House Republicans

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<v Speaker 1>this morning. What I thought was especially helpful today was

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<v Speaker 1>our members just got access and got to ask questions

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<v Speaker 1>and and and and talk about their their issues. So

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<v Speaker 1>I thought it was very good meeting. Today's meeting was

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<v Speaker 1>Trump's first sit down with the full House Republican Conference.

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<v Speaker 1>Today's meeting was Trump's first sit down with the full

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<v Speaker 1>House Republican Conference. Texas Republican Senator John Cornyn said they

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<v Speaker 1>had a good exchange and that his colleagues were candid

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<v Speaker 1>with Trump about their concerns about his tone and style.

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<v Speaker 1>Food prices around the world rose in June by the

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<v Speaker 1>most in almost four years. The United Nations food price

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<v Speaker 1>and was up more than four The law firm representing

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<v Speaker 1>Chris Christie's office in the George Washington Bridge Lane closing

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<v Speaker 1>case wants to shut down requests by defense attorneys to

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<v Speaker 1>examine personal items belonging to the Republican New Jersey governor,

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<v Speaker 1>including his cell phone. Bill Baroni and Bridget Kelly claim,

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<v Speaker 1>a former aid exchanged text messages with the governor during

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<v Speaker 1>testimony by Bridge officials. Global News twenty four hours a day,

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<v Speaker 1>powered by more than journalists and analysts in more than

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<v Speaker 1>one countries. From the Bloomberg Newsroom. I'm Jill Schneider, Charlie,

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<v Speaker 1>and we thank you, and again recapping S and P

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<v Speaker 1>five hundred index down three to two thousand, a drop

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<v Speaker 1>of two tenths of one. I'm Charlie Pellett. That's a

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<v Speaker 1>Bloomberg business flash. This is taking stock with Pim's box

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<v Speaker 1>and Kathleen waves on Bloomberg Radio at ten billion dollar

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<v Speaker 1>deal for French yogurt maker done known. Will it be

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<v Speaker 1>worth it? As it purchases white Wave foods, helping it

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<v Speaker 1>go from yogurt to products that maybe are a little

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<v Speaker 1>more popular in a world where many people are turning

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<v Speaker 1>from dairy products towards soy milk, protein shakes and other

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<v Speaker 1>kinds of foods. Joining us now as Nancy Haven's Hasty.

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<v Speaker 1>She's president and chief investment officer at Haven's Advisors here

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<v Speaker 1>in New York City. Nancy, welcome to the show. Thank you, Kathleen,

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<v Speaker 1>So this deal does it make sense? Were you surprised

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<v Speaker 1>to see you do you say, of course, Well, I

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<v Speaker 1>think UM white Wave has been a takeover target ever

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<v Speaker 1>since it was spun off from Dean Food, so it's

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<v Speaker 1>not totally surprising that this deal was announced for don Own,

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<v Speaker 1>which has quite a large UM exposure to the dairy market.

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<v Speaker 1>This plant based food company UM and organic food company

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<v Speaker 1>is a bit of a hedge to its business where

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<v Speaker 1>people are moving away from dairy and towards plant based

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<v Speaker 1>and organic foods. It's also UM the most rapidly growing

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<v Speaker 1>area of the food business, so for a lot of

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<v Speaker 1>reasons it makes sense for then Own. Nancy, explain a

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<v Speaker 1>little bit about Haven's advisors and your expertise when it

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<v Speaker 1>comes to mergers and acquisitions. UM. Okay, we do merger

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<v Speaker 1>arbitrage and we are an event based UM investment manager,

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<v Speaker 1>and I have been doing this for a little over

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<v Speaker 1>twenty years UM in this format and before that UM

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<v Speaker 1>we've been doing it elsewhere had other brokerage firms. So

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<v Speaker 1>we explain to our listeners and an events based manager

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<v Speaker 1>what exactly that means and how are you different from others? Well,

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<v Speaker 1>event may event based investment managing UH is basically investing

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<v Speaker 1>in UH situations where there is a specific event that

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<v Speaker 1>will result in a change in value for a security.

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<v Speaker 1>You have to hop in before it happens, or is

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<v Speaker 1>it more hopping on board once it is then Yes,

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<v Speaker 1>this makes sense. I see a lot of value potential

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<v Speaker 1>gains from my clients. Okay, well we are basically murder

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<v Speaker 1>of tasers merger are people generally get in after the

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<v Speaker 1>announcement is made, after the announcement of a deal or

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<v Speaker 1>an event is made, but before it's consummated. Right, You're

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<v Speaker 1>not trying to sort of divine where the next acquisition

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<v Speaker 1>is going to be. But having said that, Nancy, you

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<v Speaker 1>mentioned an interesting point about the growing business for organic food.

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<v Speaker 1>In the White Wave acquired earth Bound Farms, that was

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<v Speaker 1>the that's America's largest grower of organic produce. Back in

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<v Speaker 1>the price tag there was six hundred million dollars. Do

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<v Speaker 1>you expect multiples for these kinds of food companies to

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<v Speaker 1>increase as a result of this deal? Um? I don't

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<v Speaker 1>know that this deal is going to be done at

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<v Speaker 1>twenty four times trailing um uh ibada, twenty one times

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<v Speaker 1>uh two thousands sixteen ibada, and fourteen times two thousand

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<v Speaker 1>and sixteen after synergies. Those are all relatively healthy multiples,

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<v Speaker 1>but they're not outrageous, and multiples vary with the size

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<v Speaker 1>of the company. UM. A ten billion dollar company is

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<v Speaker 1>sort of a medium to large merger, and multiples tend

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<v Speaker 1>to tend to get lower as the deals get bigger,

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<v Speaker 1>whereas they get higher with smaller deals. So I think

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<v Speaker 1>UM I don't really anticipate that multiples will change in

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<v Speaker 1>this area, but it is unquestionably an attractive area in

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<v Speaker 1>which to invest. Our Bloomer News story focuses on UM

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<v Speaker 1>down Own's chief Emmanuel Favor that it's his it's his

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<v Speaker 1>first big move. You know, he spent the first year

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<v Speaker 1>trying to revive sluggish sales and to know core European

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<v Speaker 1>dairy segment. As you assess a deal like this, how

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<v Speaker 1>much weight do you put on White Wave in this

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<v Speaker 1>and the products and how they round out their portfolio?

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<v Speaker 1>How much do you put on management and a leader

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<v Speaker 1>like him? Well, UM management is extremely crucial to getting

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<v Speaker 1>a deal like this done. UM always getting managements to

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<v Speaker 1>agree and be on the same page UM determines the

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<v Speaker 1>success or failure of a management. These companies certainly mentioned

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<v Speaker 1>that their cultures were similar, that they were both trying

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<v Speaker 1>to achieve the same thing. They're both trying to achieve

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<v Speaker 1>healthy based eating UH in In France at Dono they

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<v Speaker 1>call it alimentation. Here's they call it food and drink UM.

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<v Speaker 1>But they're both attempting to be in exactly the same

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<v Speaker 1>business and have similar corporate cultures. So I think that

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<v Speaker 1>the prospects are probably pretty good for this merger. Nancy,

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<v Speaker 1>just a little bit more on the general market for

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<v Speaker 1>mergers and acquisitions are do you expect to see many

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<v Speaker 1>more blockbuster deals? Do you expect for example, this deal

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<v Speaker 1>Mandalise and the Hershey Company to Progress Mandels and her

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<v Speaker 1>She is really quite a different situation. As you know her.

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<v Speaker 1>She has been did for in the past and has

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<v Speaker 1>never actually ended up getting acquired her. She has a

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<v Speaker 1>trust that UM controls the voting power of Hershey, and

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<v Speaker 1>UM the state of Pennsylvania has something to do with

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<v Speaker 1>that trust and control of that trust, and they have

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<v Speaker 1>more than once decided that the employment and the presence

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<v Speaker 1>of Hershey in the state of Pennsylvania was more important

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<v Speaker 1>than uh a higher premium for the trust shares. Thank

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<v Speaker 1>you very much, Nancy Haven's Hasty the President, Chief Investment Officer.

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<v Speaker 1>Haven's advisors This is Bloomberg. The minutes of the fed's

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<v Speaker 1>meeting in June release Yesterday's show. A group of policymakers

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<v Speaker 1>debating just what's going on in the labor market. Russ

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<v Speaker 1>Kestridge coming up from Black Raw to talk about what

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<v Speaker 1>this means for equities.