Grand Metropolitan Raises Its Bid for Pillsbury : Chairmen Meet Over $65-a-Share Offer but Still Fail to Reach Agreement
Food giant Pillsbury Co. announced late Sunday that suitor Grand Metropolitan PLC of Britain is willing to raise its offer for Pillsbury to as much as $66 a share from the current $60 bid.
At $66, the British company would be paying $5.75 billion for Minneapolis-based Pillsbury, up from its earlier offer of $5.23 billion.
Pillsbury said in a statement that its chairman, Philip L. Smith, had met over the weekend with Grand Met Chief Executive Allen Sheppard. The meetings did not result in any agreement between Pillsbury and Grand Met, a major hotel and beverage conglomerate, Pillsbury noted.
At an initial meeting Friday evening, Pillsbury said, Sheppard indicated that he was prepared to increase Grand Met’s offer to $63 a share. Smith responded that he “was not willing to discuss at this time” a price which was not in the range of $68 to $73 a share set by Pillsbury directors on the recommendation of their financial advisers.
On Saturday morning, Grand Met indicated that it was making a formal offer of $65 a share, but that the offer would expire at the end of the weekend.
Pillsbury said its board of directors met Sunday to consider the $65-a-share proposal, but there was “no enthusiasm” for it. Officials branded the short deadline on the offer a “pressure tactic.”
Another meeting between Sheppard and Smith was arranged for Sunday afternoon. At that session, Sheppard indicated that although $65 was his official final offer, $66 a share “could be available,” according to the Pillsbury statement. Pillsbury said its board has authorized Smith to be available for any talks with Grand Met officials “which are designed to maximize values to Pillsbury shareholders.”
Pillsbury said Grand Met’s willingness to increase its offer confirmed the board’s view that the values in the firm “are substantially greater” than Grand Met initially recognized with its $60-a-share bid.