Diamond In The Rough: Analysts See Company As Ultimate Winner For Pringles

Despite all controversy surrounding

, Diamond Foods

will probably be the ultimate winner for Procter & Gamble's

Pringles potato chip brand, according to two analysts that cover staples stocks. The analysts made the comments in exclusive interviews with Benzinga. While questions regarding Diamond's

have swirled recently, there doesn't appear to be a plethora of possible replacement suitors at this point for Pringles should the Diamond deal collapse. “There needs to be a favorable resolution to these issues before a deal can be finalized, but it doesn't appear there were a lot of buyers for Pringles to start,” DA Davidson Tim Ramey told Benzinga. Ramey rates Diamond a buy with a $60 price target. Edward Jones analyst Jack Russo, who doesn't follow Diamond, but does follow PepsiCo

, agreed with Ramey that the world's second-largest soft drink maker isn't a likely suitor for Pringles because that deal would draw the ire of U.S. regulators from an anti-trust perspective. “I'm sure Procter & Gamble is working on a plan B and a plan C,” Russo told Benzinga. “P&G will give Diamond every chance to be the ultimate buyer.” Russo did note a private equity firm could be step in for Pringles, but he did not identify specific firms. The analyst also said Dow component Coca-Cola

probably would make a bigger move into the food space than acquiring a brand like Pringles. Ramey said there could be interest for Pringles from Dow component Kraft

and General Mills

, but said that's “a reach in both cases.” Russo added Kraft could be interested in Pringles when it completes the split of its snack food unit from its grocery store business, but that spinoff isn't expected to be completed until fall 2012. The analyst, who does cover General Mills, the second-largest U.S. food company, said Pringles “doesn't fit with what General Mills is doing.” Bottom line: It looks like Diamond Foods will ultimately get its hands on Pringles, if for no other reason than Procter & Gamble wants that to happen and because there apparently isn't an excessive amount of other potential buyers. Stay tuned to the ongoing Diamond Foods soap opera.