Tyson Foods’ long-time poultry competitor — Pilgrim’s Pride — is making a play to diversify its portfolio with Hillshire Brands reportedly offering $5.52 billion for the beef and pork branded business.
If approved the deal would products such as Jimmy Dean sausages and Hillshire lunch meats to its Pilgrim’s chicken business.
Pilgrim's offer comes days after Hillshire proposed to buy Pinnacle Foods Inc., known for its Birds Eye frozen vegetables and Duncan Hines cake mixes, in a $4.3 billion deal.
"A sale of (Hillshire) at the price … offers superior value and far greater certainty to Hillshire shareholders than the contemplated Pinnacle transaction," Pilgrim's Chief Executive William Lovette said in a letter to Hillshire.
Pilgrim's offer of $45 per share represents a premium of about 22% to Hillshire's Friday closing price. Hillshire shares were trading at $45.28 on Tuesday morning (May 27.)
Hillshire said it would review Pilgrim's proposal but it continued to believe in the merits of a deal with Pinnacle Foods. Shareholders could see more value in the Pilgrim’s deal given Hillshire said it would suspend buybacks in its plans to acquire Pinnacle Foods.
Lovette said a deal would make Pilgrim's one of the top two protein and branded food companies in the United States, behind Tyson Foods. The companies had a combined revenue of $12.4 billion in the last 12 months.