Pilgrim's Pride pushes value message in Hillshire acquisition proposal

As Pilgrim's Pride offers to acquire sausage maker Hillshire Brands for $6.4 billion, Joele Frank Wilkinson Brimmer Katcher is helping the poultry producer push the message of the combined companies' value to shareholders.

GREELY, CO: As Pilgrim’s Pride offers to acquire sausage maker Hillshire Brands for $6.4 billion, Joele Frank Wilkinson Brimmer Katcher is helping the poultry producer push the message of the combined companies’ value to shareholders.

Pilgrim’s Pride is working to halt Hillshire’s planned acquisition of Pinnacle Foods for $4.2 billion.

Joele Frank MD Jed Repko confirmed the agency’s relationship with Pilgrim’s Pride. The company said in a release on Tuesday morning that the transaction would create a "leading branded, protein-focused company with strong, consistent earnings and complementary competencies."

The proposed transaction, which is backed by Pilgrim’s board and controlling owner JBS SA, would provide "attractive valuation" for Hillshire and immediate cash value for Hillshire shareholders, Pilgrim’s Pride said in the release. It added that an acquisition would represent a "superior proposal" for Hillshire shareholders, compared with the proposed Hillshire-Pinnacle transaction, which was announced earlier this month. A clause in the Pinnacle transaction allows Hillshire’s board to enter into negotiations with a takeover bid that leads to a better outcome for shareholders. 

"We are coming forward now because the opportunity for your shareholders to obtain the compelling value represented by our proposal will no longer exist if the proposed acquisition of Pinnacle is consummated," Pilgrim’s president and CEO William Lovette wrote in a public letter to Sean Connolly, his counterpart at Hillshire.

Lovette added that the addition of Hillshire’s "portfolio of iconic brands and broad-based marketing, innovation, and distribution expertise would enhance [Pilgrim’s] position as a market leader."

Pilgrim’s Pride outlined in the release that the deal would result in a strong financial profile, with combined revenues over the last 12 months of $12.4 billion, diversified and complementary product portfolios and customer bases, and strong synergy and growth opportunities. It would also maintain Hillshire’s presence in Chicago, making the city a major center of its North American operations.

In response to the proposal, Hillshire released a statement Tuesday morning saying it "strongly believes in the strategic merits and value-creation potential" provided by the Pinnacle Foods deal.

"Consistent with its fiduciary duties, and in consultation with its independent financial and legal advisers, Hillshire Brands’ board will thoroughly review the Pilgrim’s Pride proposal," the company added.

The proposed transaction would close in the third quarter and would be subject to customary closing conditions and the termination of Hillshire's merger agreement with Pinnacle.  

Repko deferred to Pilgrim’s release when asked about the company’s communication strategy. Mike Cummins, Hillshire’s director of corporate communications, deferred to Hillshire’s statement.

Last week, Ricky Sandler, CEO of Hillshire investor Eminence Capital, said his company would vote against the Pinnacle deal, because Hillshire is paying a high price for a "mediocre set of assets." He added that shareholders would most likely vote down the transaction.

Sard Verbinnen & Co. is supporting Hillshire with comms for its proposed acquisition of Pinnacle.

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