Tyson Foods Makes $6.8 Billion Bid For Hillshire Brands

Tyson Foods announced a $6.8 billion bid for Hillshire Brands, which is contemplating a $5.52 billion offer from Tyson rival Pilgrim’s Pride.

The $50 per share cash proposition was announced early Thursday morning.

Springdale-based Tyson Foods said the proposal would provide Hillshire shareholders with an “immediate and significant return on their investment” and constitutes a “significantly superior alternative” to Hillshire’s previously announced agreement to acquire Pinnacle Foods Inc., another food products company that Hillshire has bid on.

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

Smith continued, “Tyson’s shareholders will benefit from the considerable new opportunities that come with this extraordinary strategic fit. We stand ready to work together with Hillshire’s leadership to quickly reach an acceptable definitive merger agreement, and look forward to being able to welcome Hillshire’s communities, employees and business partners to the Tyson family.”

Tyson officials said the possible Hillshire acquisition is part of an effort to grow its prepared foods division.  Jimmy Dean, Ball Park and Hillshire Farm are a few of the brands owned by Hillshire.

There is no financing condition to the proposal, as Tyson has secured a fully committed bridge facility from Morgan Stanley Senior Funding, Inc., which Tyson expects will be joined by JP Morgan Securities LLC in the very near future.