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Tyson Foods: Hillshire Brands Acquired After Bidding War With Rival

Image: Tyson Foods: Hillshire Brands Acquired After Bidding War With Rival

By    |   Monday, 09 Jun 2014 11:32 AM

Tyson Foods acquired Hillshire Brands Sunday, outbidding rival poultry producer Pilgrim's Pride with a $63 per share offer, The Associated Press reported.

Tyson had previously offered $50 per share for the company, which manufactures Jimmy Dean sausages and Ball Park hot dogs. Pilgrim's Pride then raised its bid to $55 per share.

Pilgrim's Pride said Monday that it is withdrawing its offer.

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Still, the deal is not sealed yet. It is contingent on Hillshire abandoning its plan to acquire Pinnacle Foods Inc., which makes Birds Eye frozen vegetables and Wish-Bone salad dressings. Hillshire Brands said Monday its board of directors has not yet approved Tyson's offer. The company said it does not have the right to end the deal with Pinnacle on the basis of the Tyson offer, or enter into an agreement with Tyson before the deal is terminated.

"There can be no assurance that any transaction will result from the Tyson Foods offer," Hillshire said in a statement.

Tyson's offer will be in place until Dec. 12, the final termination date of the deal with Pinnacle.

The takeover bids by Pilgrim's Pride and Tyson Foods were driven by the desirability of brand-name, prepared foods like Jimmy Dean breakfast sandwiches. Those types of products are more profitable than fresh meat, such as chicken breasts, where there isn't as much wiggle room to pad prices.

While Pilgrim's Pride and Tyson both sell such products, their businesses have been more focused on supplying supermarkets and restaurant chains.

In particular, Tyson said it was drawn by Hillshire's stable of breakfast foods, which would better position it in the fast-growing category.

Hillshire, based in Chicago, had been trying to diversify its own portfolio by moving into other areas of the supermarket with the $4.23 billion acquisition of Pinnacle. But some investors questioned the wisdom of that deal, given the outdated image of many Pinnacle brands, and the differences in the two companies' product portfolios.

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.

Tyson shares fell 2 percent in premarket trading. Hillshire shares rose 4.7 percent an hour ahead of the market opening.

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Tyson Foods acquired Hillshire Brands Sunday, outbidding rival poultry producer Pilgrim's Pride with a $63 per share offer, The Associated Press reported.
tyson foods, hillshire brands, pilgrims pride
391
2014-32-09
Monday, 09 Jun 2014 11:32 AM
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