Dean Foods Plunges on Skepticism Buyers Will Line Up for Milk

Shrinking milk business isn’t attractive, analyst says. ( Gaia Squarci, Bloomberg )

Dean Foods Co.’s shares plunged amid skepticism that the struggling dairy giant would find a buyer.

The company said Tuesday that it’s undergoing a review and contemplating a sale, but there are “no strategic buyers who would be interested in owning a shrinking milk business,” Ken Goldman, an analyst at JPMorgan Chase & Co., said in a report Wednesday.

“If Dean Foods does happen to find a buyer (unlikely, in our view), the stock will probably be purchased at a discount to the current price,” Goldman wrote. “Dean is a levered company with a fast-deteriorating business and numerous out-of-date production facilities.”

Shares fell 16 percent to $3.81 at 9:52 a.m. in New York.