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Muted Reaction to Starboard's Breakup Pitch for Smithfield Foods

According to press reports, Continental Grain's proposal to break apart Smithfield's vertically integrated operations was a catalyst for the company's eventual sale to Shuanghui, China's largest meats processor.

Smithfield will allow Shuanghui International to meet the growing demand in China for pork by importing high-quality meat products from the U.S., the company said in a statement when announcing the May 29 acquisition. "The combination creates a company with an unmatched set of assets, products and geographic reach."

The deal is expected to close in the second half of 2013 and still faces key approvals from Smithfield shareholders, in addition to the Committee on Foreign Investment in the United States, which reviews takeovers of U.S.-based companies.

"We think the acquisition is likely to be approved, and could close as early as six weeks from now," Timothy Ramey, a D.A. Davidson & Co. analyst wrote in a May 29 note to clients.

Continental Grain held nearly 6% of Smithfield's outstanding shares, according to Bloomberg compilation of Securities and Exchange Commission filings as of May 31.

A SEC filing shows Continental Grain exited its Smithfield position in May 30 and May 31 share sales.

Gavin Molinell of Starboard Value didn't immediately return a phone call seeking further comment on Smithfield Foods Monday share performacne.

-- Written by Antoine Gara in New York

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