Hillshire Brands has some options: Tyson Foods or Pilgrim's Pride?
The Chicago food company said Tuesday it is conducting separate talks with its two takeover suitors, who are competing to merge with the maker of Ball Park franks and Jimmy Dean sausage.
Tyson Foods Inc. on Thursday submitted an all-cash offer of $50 a share, or $6.1 billion. That topped an offer that came two days earlier from Pilgrim's Pride Corp. of $45 a share, or about $5.5 billion.
Industry watchers say Springdale, Ark.-based Tyson and Pilgrim's Pride, which is owned by Brazilian meat processor JBS, are trying to expand beyond the sometimes volatile sector of fresh meat and get into the more stable, and more profitable, prepared food business.
Tyson, the largest U.S. meat processor by sales, and Pilgrim's Pride, the world's second-largest chicken producer after Tyson, are vulnerable to weather and other adverse events that squeeze beef, pork and poultry supplies.
The two offers, however, come with a catch: They both require Hillshire to abandon its own plans to buy Pinnacle Foods Inc., owner of brands such as Duncan Hines, Mrs. Butterworth's and Vlasic pickles.
Hillshire shares on Tuesday were up $4.73, or 8.83%, to $58.30 in morning trading.
Tyson shares were down 56 cents, or 1.29%, to $42.84. Pilgrim's Pride shares were down 17 cents, less than 1%, to $25.75.
Times staff writer Shan Li contributed to this report.