This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Tyson Ready to Play Chicken Over Hillshire Brands

NEW YORK (The Deal) -- Tyson Foods (TSN - Get Report) announced Thursday that it was joining the battle to acquire the Chicago-based maker of Jimmy Dean sausage, unveiling a $6.8 billion offer for Hillshire Brands (HSH) that tops Pilgrim's Pride (PPC - Get Report) proposal, launched just two days earlier.

Springdale, Ark.-based Tyson, the nation's largest meat processor, said it would buy Hillshire for $50 a share in cash, valuing the target's equity at $6.13 billion based upon its nearly 123 million shares outstanding. Pilgrim's Pride offered $45 a share on Tuesday, implying an equity value of about $5.54 million.

Tyson's offer adds up to about $6.8 billion, the company said, which is $400 million more than Pilgrim's Pride $6.4 billion proposal. Tyson's offer is valued at 13.4 times Hillshire's trailing Ebitda versus the 12.5 times that Pilgrim's Pride is looking at.

WATCH: More market update videos on TheStreet TV | More videos from Jim Cramer

Investors appear to expect a bidding war, sending Hillshire's shares up nearly 16%, to $51.90, on Thursday morning.

Both Tyson and Pilgrim's Pride's offers are contingent on Hillshire canceling its pending agreement to buy Parsippany, N.J.-based Pinnacle Foods (PF - Get Report) from Blackstone Group (BX) for $6.6 billion.

Tyson's $50 per share offer represents a 35% premium over the target's closing price of $36.95 on May 9, before Hillshire struck a deal to buy Pinnacle.

Hillshire would be on the hook for a $163 million termination fee if it backs out of the Pinnacle Foods deal.

After chicken producing powerhouse Pilgrim's Pride unveiled its takeover offer for Hillshire on May 27, the latter defended its agreement to acquire Pinnacle and said it would "thoroughly review" Pilgrim's offer.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
HSH $62.96 0.00%
PPC $21.53 0.00%
PF $43.54 0.00%
TSN $50.00 0.00%
AAPL $118.30 0.00%


Chart of I:DJI
DOW 17,719.92 -78.57 -0.44%
S&P 500 2,080.41 -9.70 -0.46%
NASDAQ 5,108.6660 -18.8590 -0.37%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs