Pilgrims Pride Corp., 75% of which is being held by the world largest meat company JBS SA, intends to increase its offer for Hillshire Brands Co. According to a person with knowledge of the issue, the companys new offer amounts to 55 dollars per share and beats the 50-dollars-a-share bid made by Tyson Foods Inc. last Thursday. The total amount of the offer was raised by over a billion dollars and is estimated at more than 6.7 billion dollars.
The main competitor of Pilgrims Pride Corp. – Tyson Foods Inc. made an offer of 50 dollars a share to Hillshire last week. On the other hand, the latest bid made by Pilgrims Pride is its second, which is aiming to expand the companys reach. Pilgrims first bid amounted to 45 dollars per share.
The latest offer equals to a 49% premium to the closing stock price of Hillshire Brands Co. before it was approached by Pilgrims Pride Corp. on the first place.
Now it seems that Pilgrims and Tyson are entering a bidding war over Hillshire, as they both are trying to expand their products portfolio with exclusive meat brands such as Ball Park hod dogs and Jimmy Dean sausages. According to a person familiar with the situation, who asked not to be named because the process is not public, the current offer is not Pilgrims Pride last one.
According to some analysts working at Bernstein Research, who commented on the last weeks offer, the 50-dollar-a-share bid was “already rich”. Still, they confessed that offers are expected to be increased further provided the relative stability of Hillshires brands in combination with the wish of competing companies to broaden their reach into grocery-store items.
One of Pilgrims Pride Corp.s spokesmen said that he could not make an immediate comment, and two spokesmen of Hillshire Brands Co. did not answer to the e-mailed requests for comment after office hours.
Pilgrims Pride Corp. was 1.89% up to close at 25.92 dollars per share yesterday, marking a one-year change of +116.72%. According to the information published on CNN Money, the 4 analysts offering 12-month price forecasts for Pilgrims Pride Corp. have a median target of 23.00, with a high estimate of 25.00 and a low estimate of 17.00. The median estimate represents a -11.27% decrease from the last price of 25.92.
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