Boyar Blog

Are Investors Overlooking Heinz? Boyar's Asset Analysis Focus (AAF) Believes Heinz May be a Takeover Candidate.

Many investors are closely following the developments in Kraft's hostile bid for Cadbury. Kraft believes an acquisition of Cadbury will help
drive growth by creating the world's largest confectionery company with meaningful revenue and cost synergies. While the details of the
hostile transaction are interesting to follow including some of the conspiracy theories associated with Warren Buffett and his recent public
statements (which raised anti-trust concerns), we believe Heinz (Ticker: HNZ; $42.46) and its stable of iconic brands to be an equally
compelling story.

Boyar's flagship research publication, Asset Analysis Focus (AAF), has profiled Heinz shares in recent years. In past reports, AAF has
noted that Heinz as a mid-size food company ($13.4 billion market cap) could be easily digested by a number of the industry's larger
players. We believe the recent trend of companies with strong consumer brands being acquired at premium multiples should continue.
Recent examples of this include the Mars/Berkshire acquisition of Wrigley and Disney's acquisition of Marvel. Kraft's hostile bid for
Cadbury helps support this argument.

Could food behemoth Nestlé ($175 billion market cap) be interested in Acquiring Heinz? Here are some recent developments that
caught our attention:

- On January 4, 2010, Nestlé agreed to sell its remaining interest in Alcon to Novartis providing the Company with a huge windfall ($28
billion before taxes).

- On January 5, 2010, Nestlé stated it would not be bidding for Cadbury.

- On January 5, 2010, Nestlé reached an agreement to acquire Kraft's frozen pizza (DiGiorno, Tombstone, California Pizza Kitchen)
business suggesting the Company has an appetite to increase its already large presence in the frozen category. Heinz is a big player in
the frozen business with brands such as Smart Ones, Ore Ida and Boston Market.

- Heinz has been firing on all cylinders ever since activist investor Nelson Peltz acquired a stake and gained board representation in the
company. This is a marked improvement from the early part of Heinz's CEO Bill Johnson's tenure which was marred by a never ending
stream of impairments and restructurings. Based upon our experience, food companies historically acquire other companies within that
industry usually only after an operational turnaround has occurred.

Further, it should be noted:

- Nelson Peltz has a history of selling companies after they have been turned around. Snapple is the most well-known example.
- The transaction would satisfy Nestlé's appetite for healthy foods. Approximately 50% of Heinz's portfolio is classified in the "better for you"
category.

- Heinz would present meaningful revenue and cost synergies for Nestlé.

- Heinz's infant nutrition business (Plasmon) would likely be appealing to Nestlé. Infant Nutrition is Heinz's fastest growing business. Nestlé
is already a market leader in that business.

While we recognize that this view is not consistent with the Company's/consensus view regarding Nestlé's future capital allocation, we note
that Company statements are often made to appease a shareholder base.

Mark Boyar & Company prepared this posting as a matter of general information. We do not intend it to be a complete description of any security or company. Affiliated companies of
Mark Boyar & Company may also own positions in Heinz, Kraft, Cadbury and Nestlé. All facts and statistics referenced herein are from sources we believe to be reliable, but we do
not guarantee their accuracy and it may be incomplete or condensed. Mark Boyar & Company makes no commitment to update this posting and it may remove it at anytime from its
website. This posting represents the views of Mark Boyar & Company as of January 13, 2010 and may change without notice. This posting is made available free of charge for all
persons that may legally view this posting regardless of whether you have a relationship with Mark Boyar & Company or its affiliates. This posting does not constitute an offer or
solicitation to purchase or sell a security nor is it a solicitation of a proxy or a vote. The posting is not a research report. Individuals should consult with a qualified financial professional
before making any investment decisions.

As of January 13, 2010 Boyar Asset Management own 65656 shares of Kraft and 53500 shares of Heinz.