Shares of leading cereal marker WK Kellogg (KLG 10.19%) were up 11% as of 3:30 p.m. ET Friday, according to data provided by S&P Global Market Intelligence.

The surprising share price spike stems from rumors that Kellogg could potentially be acquired by the privately owned snacking behemoth Ferrero Group from Italy.

While it is always challenging to discern the legitimacy of merger and acquisition (M&A) speculation, these two food companies have a history of making deals with each other.

Kellogg may be an interesting stock -- regardless of the rumors

Spun off from its parent company, now Kellanova, in 2023, Kellogg became a pure-play cereal manufacturer in North America. Despite controlling the vast majority of the North American cereal market alongside mega-peers Post and General Mills, Kellogg is viewed as a turnaround value stock thanks to its exclusive focus on cereal -- a slow-growth market.

However, because of its focus on making cereal, Kellogg grew its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by 7% in 2024 as it streamlined its operations. This growth leaves the company trading at just 7 times next year's EBITDA -- a deeply discounted valuation that seems to have caught Ferrero's attention.

Famous for its Nutella, Kinder, Tic-Tac, and Ferrero Rocher brands, Ferrero's snacking focus may not seem to match Kellogg's cereal prowess. However, Ferrero did buy the Keebler and Famous Amos brands from Kellogg in 2019 for $1.3 billion, so it is reasonable to say that these rumors are not entirely smoke.

While it is too early to tell if this deal is being seriously considered, Kellogg, with its 3.2% dividend yield, remains an intriguing turnaround investment regardless of what happens with these rumors. Now, given Ferrero's interest, I know I'm not alone in these thoughts.