British Suitor Extends $5.2-Billion Offer for Pillsbury
Britain’s Grand Metropolitan PLC on Thursday extended by one week its unsolicited $5.2-billion offer to buy Pillsbury Co., saying the food and restaurant company has pursued a “costly strategy” to prevent shareholders from considering the all-cash offer.
A Pillsbury spokesman said the company had not received official word of the extension from Grand Metropolitan and therefore could not comment.
In announcing the extension, Grand Metropolitan made public a letter from two of its top executives to Pillsbury Chairman Philip Smith. The letter said Pillsbury has refused to meet with Grand Metropolitan to discuss the offer, which Grand Metropolitan has said is negotiable.
The letter was signed by Ian A. Martin, chief executive of Grand Metropolitan’s U.S. operations, and Allen Sheppard, chairman and group chief executive in London. Larry Haeg, a Pillsbury spokesman, said Thursday afternoon that no one in the company had seen the letter.
The $60-a-share tender offer was due to expire Nov. 1 but has been extended at the same price until Nov. 8, said Walter Montgomery, a spokesman for Grand Metropolitan in New York.
Smith announced Oct. 17 that Pillsbury’s directors voted unanimously to reject the offer, saying it was “inadequate.” Management was directed to pursue alternatives.
In a letter to Pillsbury employees dated Wednesday, Smith said the company was “simply not ready” to announce alternatives.
“We continue to believe it is in the best interests of all Pillsbury shareholders not to tender their stock at this time,” Smith said in the letter. “I appreciate the fact that most of our employees have not tendered their shares and I know how anxious all of you are to hear the board’s recommendation.
“Be assured that we will inform you of our plans as soon as they are completed in the days ahead.”
Steve Carnes, a former Pillsbury executive who is an analyst with Piper Jaffray & Hopwood Inc. of Minneapolis, said the extension gives Pillsbury some breathing room to plan.
Carnes said Pillsbury’s board of directors met all day Wednesday to consider alternatives, a report that Pillsbury would not confirm.
“We’re not disclosing when the board is meeting, and we’re certainly not making any announcement at this point,” Johnny Thompson, vice president of public relations, said Thursday.
