said Wednesday it expects to scrap its cash tender offer for
because of the beef processor's unresolved
accounting issues with the
Securities and Exchange Commission
Instead of purchasing the outstanding IBP common stock for cash, poultry giant Tyson said it will work on a cash election merger, in which IBP stockholders can chose cash or Tyson stock for their shares. The option for a cash election merger is automatic if the tender offer expires, and would delay the proposed $3.2 billion deal, the company said.
Under the tender offer, Tyson was to pay $30 a share in cash for 50.1% of IBP's shares and $30 a share in stock for the rest. The tender offer expires at midnight Wednesday Eastern Time.
"Unfortunately, it will be impossible to complete the cash tender offer by
Feb. 28. IBP continues to work with the SEC to resolve their accounting issues. After that work is complete, we will determine what effect these matters will have on our deal," Tyson said in its statement.
Shares of Tyson fell 19 cents, or 1.5%, to close at $12.61 on the
New York Stock Exchange
, while IBP was off 75 cents, or 2.8%, to $26.55 on the Big Board.