Britain’s giant Grand Metropolitan PLC made a surprise $60-a-share offer Tuesday to acquire Pillsbury Co., the Minneapolis-based foods and restaurant company.
The offer, outlined in financial advertising in Tuesday’s editions of the New York Times, would be worth about $5.17 billion, based on Pillsbury’s roughly 86.2 million common shares outstanding.
Pillsbury stock closed at $39 a share Monday, up $1.125 in New York Stock Exchange trading.
The offer by Grant Met, a diversified food, retailing and hotel company that is one of the world’s biggest makers of spirits, was conditioned on a majority of Pillsbury shares being tendered, on Pillsbury shareholders approving the merger and the firm’s board invalidating the company’s takeover defenses.
Grand Met’s bid took Pillsbury by surprise. Johnny Thompson, a vice president in public relations, said he found out about the offer when a reporter called him at mid-evening in Minneapolis.
Thompson said he then contacted Pillsbury’s legal staff and was told the company had not been contacted by Grand Met.
“We’ve received nothing and we’ve been contacted by no one,” Thompson said, “and until something like that happens were in no position to make a comment this evening.”
Pillsbury has been the target of lively takeover speculation in recent months, due to management turmoil and sagging earnings that have helped depress its stock price.
The company, which gets about half of its revenue from its restaurant operations, including the Burger King chain, has been attempting to rebound from the impact of a restructuring that caused its profit to fall to $69.3 million in fiscal 1988 on sales of $6.2 billion.
The profit decline stemmed largely from a restructuring charge associated with the sale of its Godfather’s Pizza chain and a number of other restaurant operations and consolidations.
Pillsbury, the nation’s fourth-largest food conglomerate, produces Green Giant vegetables, Haagen-Dazs premium ice creams and Van de Kamp’s frozen fish. Its other restaurant operations include the Steak & Ale and Bennigan’s chains.