Shares of McCormick & Company Inc (NYSE:MKC) are down 6.4% to trade at $50.30, after the company agreed to merge with Unilever (UL), creating a combined business worth roughly $65 billion. Unilever will be given $15.7 billion in cash, with stakeholders taking a 65% placement in the new organization. UL is 4.1% lower on the news. The headline is overshadowing the spice company's fiscal first-quarter earnings beat, which saw sales impress thanks to higher demand.
MKC turned in five straight losing weeks after succumbing to long-term pressure from the 200-day moving average amid rumors merger talks. Now off 26% year-to-date, the stock is on pace to close March with just five winning sessions. Today the shares are eyeing their worst daily performance since Jan. 22.
Ahead of the news, options traders were much more bearish than usual, per the security's 10-day put/call volume ratio of 2.01 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that sits in the 86th percentile of its annual range.
Today is more of the same. At last check, over 2,200 calls have changed hands, volume that's seven times the average intraday amount. The April 50 call is the culprit, with new positions being bought to open.
