Dallas, Texas 05/28/2014 (FINANCIALSTRENDS) – Hillshire Brands Co. (NYSE:HSH) yesterday received a buyout offer from Pilgrim’s Pride Corporation (NASDAQ:PPC) for $45.00 per share in cash which represents an attractive proposal for Hillshire shareholders. The said proposal provides attractive valuation of $6.4 billion. This certainly offers a potential alternative to Hillshire shareholders given its pending acquisition of Pinnacle Foods. The proposal offers a compelling value of 12.5x of the company’s trailing adjusted EBITDA, including the termination fee of $163 million payable to Pinnacle.
The transaction will help Pilgrim’s Pride to be a leading company with diversified protein product portfolios of Hillshire and Pilgrim’s brands with combined sales of $12.4 billion. Pilgrim’s Pride intends to finance the buyout with a combination of new debt financing and existing cash balances. The proposal already has received support from Pilgrim’s majority owner JBS S.A. as well as its Board of Directors. If the proposal goes through, the transaction may close by 3Q14. However, it will be subject to Hillshire Brands Co. (NYSE:HSH)’s termination of merger agreement with Pinnacle and regulatory as well as shareholder approval. Lazard and Cravath, Swaine & Moore LLP are acting as Pilgrim’s financial advisor and legal counsel, respectively, for this transaction.
Hillshire Brands Co. (NYSE:HSH) responded to Pilgrim’s unsolicited proposal and mentioned to thoroughly review the Pilgrim’s Pride proposal. However, the statement also mentioned that the Hillshire strongly believe in value creation potential and strategic merits offered by their proposed merger with Pinnacle Foods. Goldman, Sachs & Co. and Centerview Partners are financial advisors to Hillshire and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor.
Hillshire Brands, leader in convenient foods, reported $4 billion worth of sales in FY13. The Chicago based company employs over 9,000 people and its portfolio brands include Ball Park, Aidells and Hillshire Farm among others.
Yesterday, the stock of Hillshire Brands shot up more than 22% and closed at $45.19, after hitting a 52 week high of $45.52. The stock traded with significant volume of 41.66 million shares.
This report is for information purposes only, and is neither a solicitation or recommendation to buy nor an offer to sell securities. Financials Trend is not-a-registered-investment-advisor. Financials Trend is not a broker-dealer. Information, opinions and analysis contained herein are based on sources believed to be reliable, but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect our current judgment and are subject to change without notice. Financials Trend accepts no liability for any losses arising from an investor's reliance on the use of this material. Financials Trend sometimes gets compensated up to one hundred and fifty thousand dollars per month for featuring particular stocks. See site disclaimer for complete compensation. Financials Trend and its affiliates or officers currently hold no shares of these stocks. Financials Trend and its affiliates or officers will purchase and sell shares of common stock of these stocks, in the open market at any time without notice. Financials Trend will not update its purchases and sales of these stocks in any future postings on Financials Trend's websites. Certain information included herein is forward-looking within the context of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning manufacturing, marketing, growth, and expansion. The words "may", "would," "will," "expect," "estimate," "anticipate," "believe," "intend," " project," and similar expressions and variations thereof are intended to identify for ward-looking statements. Such forward- looking information involves important risks and uncertainties that could affect actual results and cause them to differ materially from expectations expressed herein. *Financials Trend does not set price targets on securities. Never invest into a stock discussed on this web site or in this email alert unless you can afford to lose your entire investment.