Tyson Foods, Inc (NYSE:TSN) Starts Bidding War On Hillshire


Dallas, Texas 05/30/2014 (FINANCIALSTRENDS) – Tyson Foods, Inc (NYSE:TSN) swooped in last week and began a bidding war for the company- Hillshire Brands, making its unsolicited offer of $6.8B for the packaged-meat producer which trumps the existing offer that had come from Pilgrim’s Pride. It was only 2 days ago that Hillshire, which is the maker of the Ball Park hot dogs & Jimmy Dean sausages, had received the offer from Pilgrim’s Pride which was $45 per share, and was valued at $6.4B. This included an assumption of debt.TSN also said that its offer of $50/ share now values the company Hillshire at 35% above the unaffected stock-price at the start of May.

The contenders

This was before it inadvertently put the company in the play by attempting to strike a certain deal of its own. The equity-value of this offer is $6.1B. This is inclusive of the assumption of debt, and is valued at $6.8B.Hillshire has offered $4.6B in May for Pinnacle Foods, which makes Vlasic pickles & Birds Eye frozen vegetables. This deal that left most analysts wondering. Now, Hillshire & its shareholders find that they are in the middle of the bidding war between 2 large rivals.

The rationale

Tyson Foods, Inc (NYSE:TSN)’s chief executive officer, Donnie Smith said that they believe that there is a very strong strategic and financial as well as operational rationale for this combination of Tyson & Hillshire. He said that their proposal now provides the Hillshire shareholders with the immediate cash-premium for the shares that they believe is greater as well as more certain in comparison to what can actually be attained in the near-term by the company, by themselves or along with any other food-processing company. In the event that TSN is successful in acquiring Hillshire, it would then mean that it is the end of the road for the Pinnacle bid.