Gold Kist shareholders back takeover bid, Pilgrim's Pride says

<p>Pilgrim's Pride Corp., the nation's second-largest poultry producer, said Thursday that its hostile bid for Gold Kist Inc. is supported by owners of most of the rival's shares.</p><p>Pilgrim's Pride said Gold Kist shareholders tendered 34.2 million shares or 67 percent of the company's stock in support of Pilgrim's Pride's $1 billion offer _ $20 per share _ by the end of Wednesday.</p><p>Pilgrim's Pride announced in August it would bid for Gold Kist, the nation's No. 3 poultry company, and it began the tender offer in September. Gold Kist has said it wants to remain an independent company and has taken legal action to ward off the bid.</p><p>Pittsburg-based Pilgrim's Pride said it extended its tender offer to buy all outstanding shares of Gold Kist until Dec. 27.</p><p>Two spokespeople for Gold Kist did not respond to repeated requests for comment. On Tuesday, the Atlanta-based company said its directors were willing to pursue a deal with Pilgrim's Pride but that the $20-per-share offer wasn't good enough.</p><p>O.B. Goolsby Jr., Pilgrim's Pride president and chief executive, urged Gold Kist directors to drop their opposition to a takeover.</p><p>"We believe this strong response is a clear indication that Gold Kist stockholders recognize the compelling value of our offer and want Gold Kist's board of directors to waive its takeover defenses, including its poison pill, so stockholders can receive their money as soon as possible," he said in a statement.</p><p>Pilgrim's Pride officials said Gold Kist's bylaws include a poison pill triggered if a hostile bidder obtains 20 percent of its stock. Gold Kist could issue new, deeply discounted stock for shareholders, which would greatly increase the cost of a takeover, they said.</p><p>Pilgrim's Pride also extended its offer to purchase Gold Kist's 10.25 percent senior notes due March 15, 2014, until Dec. 27.</p><p>Pilgrim's Pride is the second-largest chicken producer in the United States, behind Tyson Foods Inc. It sells chicken parts to fast-food, grocery and frozen-food operators. Sales in the fiscal year that ended in September were $5.24 billion.</p><p>Gold Kist has poultry operations in five Southern states and produces pork products. Its most recent annual sales figure, for the 12 months ending in September 2005, was $2.3 billion.</p><p>In Tuesday trading, Gold Kist shares rose 27 cents to $19.81 on the Nasdaq Stock Market, while shares of Pilgrim's Pride gained 74 cents, or 3 percent, to $25.52 on the New York Stock Exchange.</p>