Pilgrim’s Pride Corp. on Tuesday announced a $6.4 billion all-cash offer for Chicago-based Hillshire Brands Co.
Pilgrim’s Pride, based in Greeley, Colo., said its offer is better for shareholders than Hillshire’s pending takeover of Pinnacle Foods Inc. Pilgrim’s Pride offered $45 a share for Hillshire.
“Our proposal creates considerable value for the shareholders of both Pilgrim’s and Hillshire,” said Bill Lovette, Pilgrim’s chief executive officer. “For Hillshire shareholders, our proposal provides a substantial premium, greater certainty and immediate cash value for their shares.”
Hillshire said it will review Pilgrim’s proposal.
“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,” the company said in statement issued Monday.
Pilgrim’s Pride said the acquisition could be completed in the third quarter and it would pay a $163 million fee if Hillshire ends its deal with Pinnacle. Also, Pilgrim’s pledged to “make Chicago a major center of North American operations.”
Pilgrim’s Pride employs about 35,700 people and operates chicken processing plants and prepared-foods facilities in 12 states, Puerto Rico and Mexico.
Hillshire’s products include Hillshire Farms sliced meats, Jimmy Dean’s sausage and Ball Park franks.
J.P. Morgan analyst Ken Goldman said in a note to investors that he thought “joining two protein companies makes a lot more sense than marrying a meat company with one that has a focus on frozen vegetables.”
Hillshire on May 12 announced a deal to buy Pinnacle Foods for $4.23 billion in an effort to diversify its product lines. Pinnacle is the maker of Birds Eye frozen vegetables, Duncan Hines cakes mixes and Hungry-Man frozen dinners. Among Pinnacle’s other brands are Wish-Bone salad dressing, Celeste frozen pizzas and Vlasic pickles.
Contributing: The Associated Press