Pilgrim’s Pride offers to buy Hillshire Brands in $6.4-billion deal
Poultry producer Pilgrim’s Pride on Tuesday offered to pay cash for Hillshire Brands Co. in a deal valued at $6.4 billion that would nix Hillshire’s pending acquisition of Pinnacle Foods. Hillshire’s stock surged on the news.
Pilgrim’s Pride Corp., based in Greeley, Colo., said Tuesday’s unsolicited proposal “provides Hillshire shareholders with a substantially superior alternative” to the pending acquisition of Pinnacle, the maker of Hungry-Man frozen dinners and Duncan Hines cake mixes.
Pilgrim’s estimates that if Hillshire accepts its bid, the combined “protein-focused” company would have annual sales of $12.4 billion.
“We have long respected the Hillshire business and we are confident that Hillshire’s board and shareholders will find our all-cash premium proposal to be superior to the pending acquisition of Pinnacle,” said Bill Lovette, Pilgrim’s chief executive.
Pilgrim’s is offering to pay $45 a share, which represents a 22% premium over its Friday closing price of $37.02. Including assumption of debt, the proposal values Hillshire at $6.4 billion, Pilgrim’s said.
Hillshire shares were trading Tuesday morning at $45.21, up $8.19, or 22%. Pilgrim’s Pride shares were up 88 cents, or 3.5%, to $25.98.
Shares of Pinnacle Foods were down $2.19, or 6.6%, to $31.08.
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