Tyson outbids Pilgrim’s Pride in Hillshire Brands battle
The Hillshire Brands Company confirmed that it has received a unilateral binding offer from Tyson Foods Inc. to acquire all of the outstanding common shares of Hillshire Brands for $63.00 per share in cash. The Tyson Foods offer by its terms remains in place until the earlier of the termination of the Hillshire Brands/Pinnacle merger agreement or December 12, 2014.
“The Hillshire Brands acquisition would represent a defining moment for Tyson Foods,” said Donnie Smith, Tyson’s president and chief executive officer. “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. Now we will have those iconic #1 and #2 brands in numerous categories.”
“Tyson Foods has a history of growing through strategic acquisition,” said John Tyson, chairman of the board, “It is the view of the board of directors that this is truly a transformational opportunity and one that best fits with our strategic plan while enhancing our margins and creating long-term shareholder value.” The Tyson family and the board are prepared to issue shares to maintain the company’s investment grade credit rating.
The offer from Tyson is worth $7.75 billion based on Hillshire’s 123 million shares outstanding. Tyson values the deal at $8.55 billion, including debt, reports the Associated Press.
As previously announced on June 3, 2014, the Hillshire Brands board, after consultation with its independent legal and financial advisors, made the requisite determination under its agreement with Pinnacle Foods to commence discussions and negotiations with Pilgrim's Pride and Tyson Foods regarding their unsolicited proposals to acquire the company.
The Hillshire Brands board of directors has not approved the Tyson Foods offer, has not changed its recommendation regarding the Pinnacle merger and is not making any recommendation with respect to the Tyson offer. Hillshire Brands does not have the right to terminate the merger agreement with Pinnacle Foods on the basis of the Tyson Foods offer or enter into an agreement with Tyson Foods prior to its termination. There can be no assurance that any transaction will result from the Tyson Foods offer.
Pilgrim’s Pride announced that it has withdrawn its offer to buy Hillshire Brands, with its top offer being $55/share.
"As a disciplined acquirer, we determined that it was in the best interests of our shareholders not to increase our proposed price of $55.00 per share in cash," said Bill Lovette, Pilgrim's Chief Executive Officer. "Pilgrim's will maintain its strong focus on operational excellence and shareholder value, while pursuing acquisition opportunities that advance our stated strategy. We appreciate the support of our shareholders, customers and team members throughout this process."
Centerview Partners and Goldman, Sachs & Co. are acting as financial advisors to Hillshire Brands, and Skadden, Arps, Slate, Meagher & Flom LLP is acting as its legal advisor.
Source: Hillshire Brands Co., Associated Press; Pilgrim’s Pride, Tyson Foods