Proctor and Gamble: We’re Probably Holding onto Pringles

Proctor and Gamble (NYSE:PG) has decided to see if it can halt the sale of its Pringles brand to Diamond Foods (NASDAQ:DMND). Diamond, the seller of Emerald Nuts, has experienced enormous turmoil after its board discovered that the books had been cooked for two years by misrepresenting payments to walnut growers.

P&G says that it is disappointed with the news from Diamond and is keeping all options open. An additional question is whether Diamond will try to stop any effort to scrap the merger. P&G reserves the right to terminate it if it can prove that the financial restatements would have a “material adverse effect” on Diamond’s business. According to the agreement, any change in senior management that could negatively impact the business would also constitute a material adverse change. P&G agreed to sell Pringles in April 2011 for $1.5 billion.

Diamond Foods dropped to a new 52-week low of $21.44 in yesterday’s trading. The stock has been absolutely crushed since the scandal broke.

Here’s how these two stocks recently traded:

Procter & Gamble Co. (NYSE:PG): PG shares recently traded at $64.04,. They have traded in a 52-week range of $57.56 to $67.72. Volume today was 1,737 shares versus a 3-month average volume of 10,674,500 shares. The company’s trailing P/E is 18.83, while trailing earnings are $3.40 per share.

Diamond Foods, Inc. (NASDAQ:DMND): DMND shares recently traded at $23.13,. They have traded in a 52-week range of $21.44 to $96.13. Volume today was 40,243 shares versus a 3-month average volume of 3,098,140 shares. The company’s trailing P/E is 10.42, while trailing earnings are $2.22 per share.

To contact the reporter on this story: Scott Gillette at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com