Way Is Cleared for Buyout by Tyson, IBP Says

Meatpacking giant IBP Inc. said it expects Tyson Foods Inc. to complete its $3.2-billion purchase of the company now that regulators have finished a review of IBP’s financial records. Tyson said it is too early to determine the effect of the IBP announcement and that it will monitor developments. Analysts said they doubt that the poultry giant will pay the $30 a share in cash and stock agreed to earlier, putting the price at $1 to $4 below that figure. IBP said an investigation related to the company’s appetizer unit uncovered potential manipulation of financial records and product theft as well as mismanagement by former division managers. The findings led to a $60.4-million charge against IBP’s fourth-quarter earnings. IBP said that excluding the charge and other special items, its fourth-quarter profit fell 54% to $35 million, or 33 cents a share, missing forecasts of 40 cents.

Separately, Tyson said it expects earnings in its fiscal second quarter to be “at or near break-even.” The company had previously projected earnings of 6 to 10 cents a share, and analysts were expecting 9 cents. Shares of Dakota Dunes, S.D.-based IBP rose $1.30 to $23.75, while Springdale, Ark.-based Tyson fell 73 cents to $12.74, both on the NYSE.