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Annies Inc (BNNY): GAMCO Investors Discloses New Stake After Acquisition by General Mills Inc. (GIS) Is Announced

Mario Gabelli’s GAMCO Investors disclosed yesterday a new stake in Annies Inc (NYSE:BNNY). Over the past month, the funds affiliated with Mr. Gabelli acquired, in aggregate, more than 1.53 million shares of Common Stock (of which Mr. Gabelli can be deemed beneficial ownership), which represent almost 9% of the company’s shares outstanding.

GAMCO Investors is a New York-based investment advice and brokerage services provider managed by famed investor Mario Gabelli since inception, in 1976. The firm manages almost $50 billion in assets, and has stood out for its market-beating small-cap stock picks.

According to GAMCO Investors’ Schedule 13D filing, the purchases started on September 9, on the date that Annies Inc (NYSE:BNNY) announced that it would be acquired by General Mills, Inc. (NYSE:GIS), in a deal valued at $820 million, or $46 per share. The stock surged about 35% of the news, and has been pretty much flat ever since (since the sale was done), trading at about 67 times the company’s earnings. In late-September, General Mills, Inc. (NYSE:GIS) announced a tender offer for all outstanding shares of Annies Inc (NYSE:BNNY)’s Common Stock, at a price of $46.00 per share.

Mario Gabelli with cereal box

Annies Inc (NYSE:BNNY) is a $784.7 million market cap natural and organic food company. Other major institutional investors betting on this company are Jim Simons’ Renaissance Technologies and Dmitry Balyasny’s Balyasny Asset Management, both of which started a new stake in the company over the second quarter of the year and now own 284,900 shares and 202,436 shares, respectively.

Since the news of the merger got public, Annies Inc (NYSE:BNNY)’s President and Chief Customer Officer, and its CEO sold out of the company, taking advantage of the high stock price. Between September 9 and September 19, John M. Foraker, CEO, sold more than 55,000 shares of the company, for prices close to $46.00 per share. In addition, Mark Mortimer, President and CCO, disposed of 12,120 shares of Common Stock for an average price of $45.92 per share.

GAMCO has managed to beat the S&P 500 by a little more than 2% per year since inception. Its top pick, DIRECTV (NASDAQ:DTV) is up more than 26% year-to-date, while its largest small-cap bet, placed on Ryman Hospitality Properties Inc (NYSE:RHP), returned about 10.3%, compared to the S&P 500’s 4.9% surge.

Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned.

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