Bidding War for Hillshire Brands Reaches Height

The bidding war over the potential takeover of Hillshire Brands came to a head this week when food giant Tyson played its trump card and put in a bid of $63 a share.

The bid increased the second offer from JBS’s Pilgrim’s Pride by $8 a share and put a value on Hillshire of $8.55 billion dollars.

Tyson had set up part of the cash for the deal the previous week by announcing to the stock market that it was arranging a bridging loan of $6.75 billion.

Immediately the bid had gone in from Tyson, Pilgrim’s Pride withdrew its offer.

However, the Tyson bid, as with the Pilgrim’s Pride bid, is subject to Hillshire dropping plans to acquire Pinnacle Foods.

Hillshire had committed itself to buying Pinnacle at a cost of $18 a share and with the Tyson bid staying on the table until December this year, there is expected to be some hard bargaining still to come.

Meanwhile, the attempts by Tyson to secure Hillshire, the former meat and food processing arm of Sara Lee, with its famous brands such as Jimmy Dean’s and Ball Park hot dogs, have been fiercely criticised by the National Farmers Union.

The NFU is concerned that Tyson will now have too big a share of the processing sector and will start dictating prices, damaging the farmers and ranchers.

In another international deal, the future of Spanish based further processor Campofrio has been secured following a share tender.

WH Foods the combination of Shuanghui and Smithfield, who originally had a large stake in Campofrio, will now have about a one third interest in the company while Sigma Alimentos will have just under two thirds of the company.

Also in Spain, Nutreco has announced that it is now not going to go ahead with its sale of its meat and feed compound businesses in Spain and Portugal.