Subscribe Register Login

Tuesday, July 22, 2014, 8:34 a.m.
Top Picks - Mobile App

Tyson's $8.55 billion offer tops Hillshire bid war

By Gavin Lesnick

This article was published June 9, 2014 at 6:48 a.m.

these-file-photos-show-a-package-of-frozen-tyson-chicken-nuggets-left-and-a-package-of-hillshire-farm-sausage-in-palo-alto-calif-two-days-after-poultry-producer-pilgrims-pride-made-a-558-billion-dollar-bid-for-the-maker-of-ball-park-hot-dogs-and-jimmy-dean-sausages-tyson-foods-co-on-thursday-may-29-2014-sweetened-the-pot-with-a-62-billion-offer-the-deal-sent-hillshire-shares-up-14-percent-in-premarket-trading

These file photos show a package of frozen Tyson chicken nuggets, left, and a package of Hillshire Farm sausage, in Palo Alto, Calif. Two days after poultry producer Pilgrim’s Pride made a $5.58 billion dollar bid for the maker of Ball Park hot dogs and Jimmy Dean sausages, Tyson Foods Co. on Thursday, May 29, 2014, sweetened the pot with a $6.2 billion offer. The deal sent Hillshire shares up 14 percent in premarket trading.

Tyson Foods Inc. said Monday that its $8.55 billion all-cash offer for Hillshire Brands Co. topped a bidding war for the company between Springdale-based Tyson and Pilgrim’s Pride Corp.

Tyson President and CEO Donnie Smith called it "a defining moment" for the company.

"Our strategy has been to grow our prepared foods business, and it has been our aspiration to be a leader in retail prepared foods just as we are in chicken," he said in a statement. "Now we will have those iconic No. 1 and No. 2 brands in numerous categories."

Tyson's $63-per-share cash offer, which values Hillshire at about $8.55 billion including the company's outstanding net debt, is conditioned on Hillshire terminating its agreement to buy Pinnacle Foods. It's also subject to standard regulatory approval and conditions.

The Colorado-based Pilgrim's confirmed in a statement Monday morning that it had withdrawn its bid.

The Tyson board unanimously approved its offer. Chairman John Tyson called the acquisition a "transformational opportunity" that "best fits with our strategic plan while enhancing our margins and creating long-term shareholder value."

Smith said Hillshire's products, which include Jimmy Dean sausages and Ball Park hot dogs, would help Tyson's growing prepared-food segments.

Annual synergies of at least $300 million are projected, Tyson said, because of "operational efficiencies, purchasing, distribution, supply chain efficiencies, upgrading raw materials and through the combination of the two companies' talented sales and marketing teams and alignment of shared service functions."

Pilgrim's Pride first bid $6.4 billion for Hillshire before Tyson topped that offer with a $6.8 billion bid. Pilgrim's Pride raised its bid to $7.7 billion last week, and Hillshire then began discussions with each company. The bidding concluded Sunday, Tyson said.

In the Pilgrim's statement Monday, CEO Bill Lovette said the company determined it was not in the "best interests" of shareholders to offer more than $55 a share.

"Pilgrim's will maintain its strong focus on operational excellence and shareholder value, while pursuing acquisition opportunities that advance our stated strategy," he said. "We appreciate the support of our shareholders, customers and team members throughout this process."

A conference call with Tyson executives is scheduled for 8:30 a.m. Monday. Participants can call (888) 455-8283 and use the pass code "Tyson Foods." It will also be webcast online at the Tyson website and a replay will be posted there about an hour after it completes.

Comments on: Tyson's $8.55 billion offer tops Hillshire bid war

To report abuse or misuse of this area please hit the "Suggest Removal" link in the comment to alert our online managers. Read our Terms of Use policy.

Subscribe Register Login

You must login to make comments.

TOP JOBS

  • Special ed teacher

    lakeside school district in Hot Springs is accepting applic...
    HOT SPRINGS NATIONAL PARK, AR

  • Police officer

    city of sherwoodthe City of Sherwood is accepting applicati...
    SHERWOOD, AR

  • Direct care positi

    timber ridgeons Benton, ARProvide support to individuals, in...
    BENTON, AR

  • Case manager

    “Making differences through quality care”case manager Friend...
    RUSSELLVILLE, AR

  • Counselor

    University of the OzarksUniversity of the Ozarks in Clarksvi...
    CLARKSVILLE, AR

Search 846 jobs >

Top Picks - Mobile App
Arkansas Online