clear
Wednesday May 25th, 2016 11:06PM

Tyson wins bidding war to gobble up Hillshire

By The Associated Press
NEW YORK - Tyson Foods Inc. has won a bidding war to gobble up Hillshire Brands, the maker of Jimmy Dean sausages and Ball Park hot dogs. <br /> <br /> Tyson, which has a plant in Forsyth County, had been vying with rival poultry producer Pilgrim's Pride for Hillshire, which wrapped up its bidding process Sunday. Pilgrim's Pride has a facility in Gainesville. Tyson ended up raising its offer to $63 per share. It had previously offered $50 per share, after which Pilgrim's Pride raised its bid to $55 per share. <br /> <br /> Pilgrim's Pride, which is owned by Brazilian meat giant JBS, said Monday that it is withdrawing its offer. <br /> <br /> Still, the deal is not sealed yet. It is contingent on the termination of Hillshire's offer to acquire Pinnacle Foods Inc., which makes Birds Eye frozen vegetables and Wish-Bone salad dressings. Pinnacle could choose to cut bait and walk away with $163 million breakup fee, or force the deal to a vote by Hillshire shareholders. <br /> <br /> A Pinnacle representative didn't immediately return a call for comment. <br /> <br /> In a conference call with reporters, Tyson CEO Donnie Smith said he was confident the $63 offer would end up being worthwhile for Tyson shareholders, despite how high the price went. <br /> <br /> ``Great brands like Jimmy Dean and Ball Park just don't become available very often,'' Smith said. <br /> <br /> Hillshire's stock closed at $36.95 on May 9, the day before the company announced the Pinnacle deal. <br /> <br /> Tyson, like Pilgrim's Pride, has been looking to boost its presence in brand-name, prepared foods like Jimmy Dean breakfast sandwiches. Those types of products are more profitable than fresh meat, such as chicken breasts, where there isn't as much wiggle room to pad prices. <br /> <br /> While Tyson and Pilgrim's Pride already sell some brand-name products, their businesses have been more focused on supplying supermarkets and restaurant chains. <br /> <br /> In particular, Tyson said it was drawn by Hillshire's stable of breakfast foods, which would better position it in the fast-growing category. <br /> <br /> Tyson also noted the potential for cost savings by combining supply chains, transportation and other operations with Hillshire. But Smith said it was too early to comment on how many jobs could be cut as a result of the deal. <br /> <br /> Tyson's offer will be in place until Dec. 12, the final termination date of the deal with Pinnacle. <br /> <br /> Hillshire Brands noted it does not have the right to end the deal with Pinnacle on the basis of the Tyson offer, or enter into an agreement with Tyson before the deal is terminated. <br /> <br /> ``There can be no assurance that any transaction will result from the Tyson Foods offer,'' Hillshire said in a statement. <br /> <br /> Hillshire, based in Chicago, had been trying to diversify its own portfolio by moving into other areas of the supermarket with the $4.23 billion acquisition of Pinnacle. But some investors questioned the wisdom of that deal, given the outdated image of many Pinnacle brands and the differences in the two companies' product portfolios. <br /> <br /> The offer from Tyson is worth $7.75 billion based on Hillshire's 123 million shares outstanding. Tyson values the deal at $8.55 billion, including debt. <br /> <br /> Tyson shares fell 2 percent in premarket trading. Hillshire shares rose 4.7 percent an hour ahead of the market opening. <br /> <br /> <br /> <br /> Follow Candice Choi at www.twitter.com/candicechoi
© Copyright 2016 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
US stocks post sixth straight year of gains
U.S. stocks ended a strong 2014 with moderate declines Wednesday.
4:43PM ( 1 year ago )
Palestinians push ahead in pursuit of war crimes charges against Israel
Stung by a resounding defeat in the U.N. Security Council, the Palestinians announced Wednesday that they joined the International Criminal Court to pursue war crimes charges against Israel.
1:57PM ( 1 year ago )
Business News
Grass fire impacts rush hour traffic on 985
Rush hour traffic on I-985 was slowed by a grass fire Wednesay afternoon with one lane closed while firefighters fought the blaze.
10:19PM ( 1 year ago )
Judge denies motions to move, delay Tsarnaev trial
Lawyers for Boston Marathon bombing suspect Dzhokhar Tsarnaev asked a federal appeals court Wednesday to overturn a judge's decision to not move his upcoming trial out of state.
10:02PM ( 1 year ago )
Sheriff: Man shot 2 on I-85 because he wanted car
A 22-year-old man shot two people who stopped to give him a ride on Interstate 85 in South Carolina on Christmas Eve because he wanted their car to drive to Georgia, a sheriff said Wednesday.
5:21PM ( 1 year ago )
Local/State News
Teenage suspect in Flowery Branch armed robbery now in police custody
​Flowery Branch police say a 19-year-old suspect connected to an armed robbery that took place last week has turned himself in.
By AccessWDUN Staff
8:03PM ( 3 hours ago )
NTSB releases likely cause of fatal Gainesville plane crash in 2014
It was likely a loss of engine power caused by an undetected valve blockage that brought down a small plane, killing two people on board on Oct. 16, 2014.
4:19PM ( 6 hours ago )
The Latest: 11 states sue over federal transgender directive
Texas and 10 other states are suing the Obama administration over new federal guidance for transgender students in public schools
2:54PM ( 8 hours ago )
UPDATE: Hunter finds human skull near Auburn; search for bones underway
​Sheriff's officials in Gwinnett County said they're searching an area near the town of Auburn for bones after a hunter found a skull.
1:00PM ( 10 hours ago )
Suwanee refinances bonds, saves $3 million
The Suwanee city council approved the refinancing of the city's open space bonds at their meeting Tuesday evening, a measure that will save the city $3 million.
12:22PM ( 10 hours ago )