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TheMeatSite Newsletter - 4 June 2014

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TheMeatSite
Wednesday 4th June 2014.
Chris Harris - TheMeatSite Editor in Chief

Chris Harris
Editor in Chief


Zoetis

Gloves are Off in Battle for Hillshire Brands

A bidding war appears to have opened up over the former Sara Lee meat and food processing business, Hillshire Brands.

Last week, Pilgrim’s Pride, the US poultry processing arm of the Brazilian meat processing giant JBS put in a bid of $45 a share for Hillshire Brands in a move that Pilgrim’s said would create a fully integrated branded protein leader with combined sales of $12.4 billion across a broad portfolio of brands.

The value of the initial bid was $6.4 billion.

Bill Lovette, Pilgrim's Chief Executive Officer, said: "Our proposal creates considerable value for the shareholders of both Pilgrim's and Hillshire. "For Hillshire shareholders, our proposal provides a substantial premium, greater certainty and immediate cash value for their shares.”

Earlier in May, Hillshire had put in a bid to acquire Pinnacle Foods in a move that Hillshire’s CEO and president Sean Connolly said would strengthen the company’s position in frozen foods and offer new opportunities in the centre store for Hillshire’s brands and in refrigerated for Pinnacle Foods’ brands.

“We believe our increased scale combined with a more diversified portfolio will deliver strong, consistent cash flows. This will enable us to continue to invest in our brands, enhance our portfolio, pursue value accretive M&A and deliver significant long-term value to our shareholders,” he said.

At the time of Pilgrim’s initial offer, Hillshire said it was looking to the Pinnacle deal to move the company forward, but that it would look at the offer made by Pilgrim’s.

A few days late a counter bid for Hillshire came in from the US’s other major poultry and meat processor, Tyson Foods.

This offer upped the bid to $50 a share.

Tyson said that it was an alternative to Hillshire’s tie up with Pinnacle Foods.

Donnie Smith, Tyson Foods President and Chief Executive Officer, said: “We believe that there is a strong strategic, financial and operational rationale for the combination of Tyson and Hillshire.

“Our proposal provides Hillshire shareholders with an immediate cash premium for their shares that we believe is both greater and more certain than what can be attained in the near term by the Company either on a standalone basis or in combination with any other food processing company.”

However, this week, Pilgrim’s has come back with another offer – this time $55 a share, making the total value of the bid $7.7 million.

In response, Hillshire said that both the Tyson and the Pilgrim’s bids were dependent on ending interest in Pinnacle Foods

However a statement from Hillshire said: “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 company has spelt it out that its board of directors “is not withdrawing, modifying, withholding or qualifying its recommendation with respect to the Pinnacle merger agreement and the merger, or proposing to do so”.

Hillshire Brands board added that it is also not making any recommendation with respect to either the Pilgrim’s Pride or Tyson Foods proposals.

With renewed bids coming in and Hillshire taking an entrenched view of its agreement with Pinnacle Foods, there could be a long and bitter fight emerging over Hillshire Brands and some of America’s iconic brands including Jimmy Dean, Ball Park, Hillshire Farm, State Fair and Sara Lee.

For a company that emerged out of Sara Lee just over two years ago, there is now a major battle erupting over its future.



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Global Meat Industry News

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Brazilian Cattle Prices Ease, as Beef Exports Rise
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   Estonia

HKScan Merges Estonian Subsidiaries

   Sweden

HKScan Lantmännen Join Forces

   Russian Federation

Drop in Value of Ruble Hits Cherkizovo’s Revenue

   Netherlands

Risk Management to Combat Dairy Price Volatility

   United States

Pilgrim’s Pride Ups Bid for Hillshire Brands
US M-COOL to be Discussed During World Pork Expo
Hog Prices Take Big Drop: What's Next?
Hog Slaughter Numbers Lowest Since July 2012
Recent Media Reports Re-visit Antibiotic Resistance
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EPA Settles with Meat Processor over Waste Water Treatment
USDA Announces New Campylobacter Standards for Chicken
Foster Farms Continues to Reduce Salmonella in Chicken
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Tyson Foods Bids for Hillshire
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Global Malnutrition Depends on Productivity, Climate Change
North Carolina Firm Expands Cooked Chicken Capacity
Salmonella in Poultry Case Count Reaches 574
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Jim Wyckoff's Weekly Cattle, Hog Outlook
US Agencies Join Forces for Future Foodborne Disease Outbreaks

   European Union

Irish Farmers Call for Halt to Bad Mercosur Trade Deal
EU Pig Prices: Knot is Cut - Prices Finally Go Up

   Argentina

Patagonia, Bolivia, Brazil Welcome Disease News From OIE

   United Kingdom

Internet Boost to UK Pork Sales
Sustainability Welfare Central to New UK Beef Plant
New High for UK Sheep Meat Exports to non-EU Markets
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Danish Crown Unable to Save 190 Jobs at Bornholm

   Iceland

Icelandic Herring Trawl and Seine Fishery Awarded Sustainable Certification

   Global

New Guidelines on Animal Health, Welfare, Antibiotic Resistance
International Call for an End to Term 'Bird Flu'
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   Canada

Government Support Canada's Pig Industry to Adapt to Consumer Demands

   New Zealand

Good Times With a Near Record Fonterra Payout and a Good Forecast

   Norway

Safeguarding Future Generations' Fish Oil Needs

   China

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