Tyson Foods Begins Offer to Buy IBP Stock

Tyson Foods Inc. on Monday began a cash tender offer to purchase 50.1 percent of IBP Inc.’s outstanding shares, an offer that will expire at midnight Jan. 10.

Springdale-based Tyson, the world’s poultry leader, on Dec. 4 announced its plan to buy IBP, a beef producer. Tyson’s offer of $26 per share for IBP, of Dakota Dunes, S.D., topped a November offer of $25 per share from meatpacker Smithfield Foods Inc.

A combined Tyson and IBP would create a diversified meat- processing powerhouse with more than $21 billion in sales from beef, pork and poultry.

“We have begun the due-diligence process and, at this point, have identified up to $100 million in annual synergies and expect to achieve half of that in the first year,” said John Tyson, president and CEO of Tyson Foods.

Tyson Foods’ $26-per-share tender offer represents the cash component of a proposal that also calls for IBP shareholders to receive $26 each in Tyson stock.

The tender offer is subject to certain conditions, such as 50.1 percent of IBP shares being validly tendered, Tyson Foods said.

Monday, the National Farmers Union urged the Justice Department to reject Tyson’s IBP bid, stating in a letter that “a merger between the two meat-processing companies would decrease competition and hurt independent livestock producers.”

Union president Leland Swenson also said: “The choice between a Smithfield acquisition vs. a Tyson acquisition of IBP is similar to a choice between death by hanging vs. a firing squad. Either way, the independent producer is gone at the end of the day.”

The U.S. Agriculture Department and at least three U.S. senators from farm states also have criticized a Tyson-IBP merger and urged federal antitrust regulators to scrutinize the proposal.

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In an unrelated note, Tyson executive Archie Schaffer may find out soon whether he will be pardoned by President Clinton.

Several Arkansas elected officials have been pleading for Schaffer to be pardoned since Sept. 25, when he was sentenced to a year in prison for trying to illegally influence Clinton’s former agriculture secretary.

“I think it’s terribly sad and very unfortunate, and I hope the president will very quickly grant to Mr. Schaffer a pardon,” said Sen. Tim Hutchinson, R-Ark., who is generally at odds with Clinton politically.

The rest of the Arkansas congressional delegation and Gov. Mike Huckabee, a Republican, also have asked Clinton to pardon Schaffer.

Clinton’s second and final four-year term as president will end in January.