CHICAGO, April 22 (Reuters) - Smithfield Foods Inc's shares rose as much as 9 percent on Wednesday amid rumors that the company may be the target of a takeover by Chinese agriculture company COFCO.
The rumors had COFCO, China's largest national agricultural trading and processing company, offering $17 per share for Smithfield, traders and analysts said. COFCO bought about 5 percent of Smithfield's common stock a year ago.
Smithfield denied the rumors. 'COFCO is not offering to buy out Smithfield at $17 per share,' it said in an email.
Smithfield Foods is the largest U.S. hog and pork producer.
'Smithfield Foods calls active on renewed takeover chatter,' said Paul Foster, options strategist at Web information site theflyonthewall.com.
Smithfield shares jumped more than 9 percent to $10.82 early on Wednesday before closing up 4.34 percent at $10.33, in heavier-than-normal trading.
'If the market believed in it, the stock would have been at $17,' said one analyst, who downplayed the rumor.
In the options market, investors scooped up Smithfield's call options, which give buying rights to the underlying stock, hoping that shares would extend their gains, analysts said.
In all, about 29,000 calls and 1,627 puts changed hands, 20 times the usual volume, according to option analytics firm Trade Alert.
(Reporting by Bob Burgdorfer; Editing by Gary Hill) Keywords: SMITHFIELD/SHARES (bob.burgdorfer@thomsonreuters.com ; +1 312 408 8723; Reuters Messaging: bob.burgdorfer.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The rumors had COFCO, China's largest national agricultural trading and processing company, offering $17 per share for Smithfield, traders and analysts said. COFCO bought about 5 percent of Smithfield's common stock a year ago.
Smithfield denied the rumors. 'COFCO is not offering to buy out Smithfield at $17 per share,' it said in an email.
Smithfield Foods is the largest U.S. hog and pork producer.
'Smithfield Foods calls active on renewed takeover chatter,' said Paul Foster, options strategist at Web information site theflyonthewall.com.
Smithfield shares jumped more than 9 percent to $10.82 early on Wednesday before closing up 4.34 percent at $10.33, in heavier-than-normal trading.
'If the market believed in it, the stock would have been at $17,' said one analyst, who downplayed the rumor.
In the options market, investors scooped up Smithfield's call options, which give buying rights to the underlying stock, hoping that shares would extend their gains, analysts said.
In all, about 29,000 calls and 1,627 puts changed hands, 20 times the usual volume, according to option analytics firm Trade Alert.
(Reporting by Bob Burgdorfer; Editing by Gary Hill) Keywords: SMITHFIELD/SHARES (bob.burgdorfer@thomsonreuters.com ; +1 312 408 8723; Reuters Messaging: bob.burgdorfer.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.