Tyson Pursues Another Option with IBP

Today marked the fifth deadline set by Tyson Foods Inc. of Springdale in an effort to purchase IBP Inc. But the company has decided to forego another deadline extension by using a cash election merger option.

Meanwhile, the Securities and Exchange Commission continues to investigate IBP’s bookkeeping. Its probe has delayed the cash tender offer IBP originally accepted from Tyson on Jan. 1.

“Unfortunately, it will be impossible to complete the cash tender offer by [today],” John Tyson, chairman, president and CEO of Tyson Foods, said in a statement.

“IBP continues to work with the SEC to resolve their accounting issues. After that work is complete, we will determine what effect these matters will have on our deal.”

A cash election merger is an option Tyson has in its merger agreement with IBP. It requires both Tyson and IBP to conduct special shareholders meetings. IBP shareholders will vote either in person or by proxy rather than tendering shares directly to Tyson. They will have the option of either accepting Tyson stock for IBP stock or having a portion of their IBP stock exchanged in cash.

The move further delays the merger, but Tyson said it did not want to continue setting expiration dates.

“It’s action we’re taking in interest of prudence,” Ed Nicholson, Tyson spokesman, said. “Until the SEC issues are resolved, it’s impossible to determine what affect those issues will have on the deal.”

Shares already tendered in the cash tender offer will be returned following today’s 11 p.m. deadline.

Eighty percent of IBP’s stock had been tendered as of last week.

IBP Inc. of Dakota Dunes, S.D., the world’s largest producer of fresh meat, released a statement saying it still hopes the matter with the SEC is resolved soon.

“While the process for completing this transaction will now change, the basic terms of the agreement do not,” the IBP statement said.

The original offer was a total package of about $4.7 billion, including $1.5 billion in assumed debt.