Pilgrim’s Pride, part of the JBS SA Group, is offering to buy Hillshire Brands for $45.00 per share in a deal worth $6.4 billion. Hillshire closed at $37.02 on Friday, reports Business Insider.
"Our proposal creates considerable value for the shareholders of both Pilgrim's and Hillshire," said Pilgrim's CEO Bill Lovette. "For Hillshire shareholders, our proposal provides a substantial premium, greater certainty and immediate cash value for their shares. We have long respected the Hillshire business and we are confident that Hillshire's Board and shareholders will find our all-cash premium proposal to be superior to the pending acquisition of Pinnacle. For Pilgrim's, the addition of Hillshire's portfolio of iconic brands and broad based marketing, innovation and distribution expertise will enhance our position as a market leader. With our complementary products, we believe that together Pilgrim's and Hillshire will better serve our combined customer bases for the benefit of all our stakeholders. We look forward to working constructively with Hillshire to sign a definitive merger agreement and quickly realize the benefits of this combination."
In a public letter issued to Hillshire Brands CEO Sean Connolly, Lovette said that the companies met on Feb. 20, and that the poultry processor has long desired to acquire the company. Pilgrim’s acquisition offer comes in the wake of the announced acquisition of Pinnacle Foods by Hillshire Brands. Pillgrim’s offer includes a $163 million termination fee payable to Pinnacle Foods.
“We are coming forward now because the opportunity for your shareholders to obtain the compelling value represented by our proposal will no longer exist if the proposed acquisition of Pinnacle is consummated,” the letter states. “Our offer is therefore conditioned on the termination of this transaction (and our proposed purchase price is not subject to reduction for any related termination fees).”
UPDATE: Hillshire Brands Co. has released a statement in response to the proposal. It reads:
"The Hillshire Brands Company today issued the following statement in response to the unsolicited proposal by Pilgrim's Pride Corporation to acquire Hillshire Brands for $45.00 per share in cash.
"We continue to strongly believe in the strategic merits and value creation potential provided by the proposed transaction with Pinnacle Foods. Consistent with its fiduciary duties, and in consultation with its independent financial and legal advisors, Hillshire Brands' Board will thoroughly review the Pilgrim's Pride proposal."
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: www.businessinsider.com, Pilgrim's Pride, Hillshire Brands