Meat Market Money: $6.8B Bidding War for Hillshire Farms

Meat Market Money: $6.8B Bidding War for Hillshire Farms

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There’s money in the meat market, as people throwing bids in the meat aisle.


On Tuesday, Pilgrim’s Pride, the world’s second largest fresh and frozen chicken producer, offered a $5.58 billion takeover bid for Hillshire Brands. On Thursday, Tyson Foods joined in the fun, offering a $6.8 billion buy-out.


“As you are well aware, it has long been our desire to acquire the company,” Pilgrim’s said in a public letter on Tuesday to Hillshire CEO Sean Connolly, according to the AP. Offering $45 per share for Hillshire, Connolly said that the buyout would be a “substantially superior” price. Two days later, Tyson swoops in offering $50 per share.


“Our proposal provides Hillshire shareholders with an immediate cash premium for their shares that we believe is both greater and more certain than what can be attained in the near term by the company,” said Donnie Smith, Tyson Foods president and CEO, “either on a standalone basis or in combination with any other food processing company.”


The bidding wars come just weeks after Hillshire announced a $4.23 billion plan to buy Pinnacle Foods, which makes frozen-food products such as Birds Eye frozen vegetables, Duncan Hines cake mixes and Hungry Man frozen dinners. Hillshire said they were looking to break into another part of the frozen-foods aisle with the take over. But with Pilgrim’s Pride’s and Tyson’s offers, there is the possibility of a broken deal with Pinnacle.


ilgrim’s Pride is majority owned by JBS, a Brazilian meat company that is the largest meat producer in the world. The company is looking to sell more popularly branded products, which it sees as a more profitable model than selling private-label meats to supermarkets, according to the AP.


Pilgrim’s Pride has said the deal could close in Q3 of 2014, but only if Hillshire nixes the Pinnacle-plan. Pilgrim’s Pride has said they would pay the $163 million termination fee that would result from ending the deal.


But they may not get what they want, if Tyson has their way. And in the meantime, Pinnacle’s shares have dropped 6 percent to $31.19. For now, Pinnacle has been left out in the cold, as Pilgrim’s Pride and Hillshire Brands work it out.


FEATURED PHOTO: U.S. Department of Agriculture/Flickr


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