Shares of a number of packaged food makers are seeing strength in early trading following the circulation of a disputed report claiming that 3G Capital, which has a stake in Kraft Heinz (KHC), was looking to acquire General Mills (GIS). Subsequent to the circulation of the report, CNBC's David Faber stated on air that there was "no truth" to the report.

DISPUTED REPORT: Earlier this morning, MT Newswires was cited as the source of a report claiming that General Mills had "reportedly agreed" to be acquired by private equity firm 3G Capital in an all cash transaction. After that report was circulated among traders, CNBC's David Faber stated on air on the business news network that there is "no truth" to the report of 3G bidding on General Mills.

GENERAL MILLS WON'T COMMENT ON RUMORS: Contacted by The Fly after an unknown newswire issued a report claiming that 3G Capital has reached an agreement to acquire General Mills (GIS), a spokesperson for the latter said that "as standing practice, we don't comment on market rumors."

KRAFT CALL: Additionally fueling speculation about potential dealmaking in the space may be comments made by Kraft Heinz on its earnings call last night, during which the company was repeatedly questioned about its M&A plans in the wake of its failed bid for Unilever (UN). Sanford Bernstein analyst Alexia Howard said she has heard "concerns from some investors" that the company's approach to reducing costs could make it harder to execute additional deals going forward. She added: "I guess the fear is that the board's a potential target. Companies wouldn't want their legacy to be signed to a company that could then somehow damage what they've been building up over the decades. And so in this matter I think perception could be more important than reality." In reply, CEO Bernardo Vieira Hees said, according to a transcript of the call: "Look, I think, like you said, we need to separate what's perception and what are facts, right. And so if you think about our culture and what it's all about, it's actually quite simple and very consistent over decades. It's all about ownership, meritocracy, high performance, brands, and dreaming big. It's all about those five things. And I truly believe those five things are applicable in many companies and many segments and so on." Responding to a separate question from a Barclays analyst about the company's M&A strategy, CFO Paulo Basilio said "the way that we think about our M&A framework, which hasn't changed since the beginning, and the framework is pretty much that we want to own brands that we'd be happy owning these brands for the long run, brands with strong equity, strong relative market share, brands that can travel."

PRICE ACTION: In morning trading, General Mills shares are off their earlier highs, but remain about 4% higher. Others in the packaged foods space are also advancing this morning, with Kellogg (K) up over 2%, Hain Celestial (HAIN) up 1.5%, Mondelez (MDLZ) up fractionally, and Campbell Soup (CPB) up nearly 1%.