CHICAGO -- The Hillshire Brands Co. has announced that its board of directors, after consultation with its independent legal and financial advisors, has determined under Hillshire Brands' merger agreement with Pinnacle Foods Inc. to provide information to and conduct separate discussions with Pilgrim's Pride Corp. and Tyson Foods Inc. with regard to their recent unsolicited proposals.
On May 27, Pilgrim's Pride proposed to acquire all of Hillshire Brands' outstanding common stock for $45 per share in cash, or $6.4 billion.s
On May 29, Tyson Foods announced its proposal to acquire Hillshire Brands for $50 per share in cash, or $6.8 billion.
On June 1, Pilgrim's Pride increased its offer to $55 per share in cash. The proposal represents an increase of $1.3 billion versus Pilgrim's initial proposal, and a 49% premium over Hillshire's share price one day prior to the announcement of its transaction with Pinnacle Foods Inc. Pilgrim's revised proposal is not subject to any financing conditions or contingencies, it announced separately.
Hillshire Brands is party to a merger agreement with Pinnacle Foods pursuant to which Hillshire Brands agreed to acquire Pinnacle Foods for per share consideration of $18 in cash and 0.5 shares of Hillshire Brands common stock.
Both the Pilgrim's Pride and Tyson Foods proposals are conditioned on the termination of the Pinnacle Foods merger agreement. Hillshire Brands does not have the right to terminate the Pinnacle Foods merger agreement on the basis of either of these proposals or enter into an alternative acquisition agreement with either of these parties prior to termination. There can be no assurance that any transaction will result from these proposals.
The Hillshire Brands board is not withdrawing, modifying, withholding or qualifying its recommendation with respect to the Pinnacle merger agreement and the merger, or proposing to do so, and is not making any recommendation with respect to either the Pilgrim's Pride or Tyson Foods proposals, it said.
Greeley, Colo.-based Pilgrim's Pride employs approximately 35,700 people and operates chicken processing plants and prepared-foods facilities in 12 states, Puerto Rico and Mexico. Pilgrim's primary distribution is through retailers and foodservice distributors.
Springdale, Ark.-based Tyson Foods is one of the world's largest processors and marketers of chicken, beef and pork. It produces a wide variety of protein-based and prepared food products and is a market leader in the retail and foodservice markets it serves.
Hillshire Brands is a leader in branded, convenient foods. The company generated approximately $4 billion in annual sales in fiscal 2013, has more than 9,000 employees, and is based in Chicago. Hillshire Brands' portfolio includes brands such as Jimmy Dean, Ball Park, Hillshire Farm, State Fair, Sara Lee frozen bakery and Chef Pierre pies, as well as artisanal brands Aidells, Gallo Salame and Golden Island premium jerky.
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