The Laurel, Miss., company, which is completing discussions with possible suitors including Cargill and Continental Grain, could finalize a deal by Monday, unnamed sources have told the Wall Street Journal. The sale price would value the company at about $203 a share.
Sanderson, the country's third-largest chicken producer, processes about 13.6 million chickens per week in its 13 poultry plants. It provides poultry products to supermarket chains Walmart (WMT) - Get Walmart Inc. Report and Albertsons (ACI) - Get Albertsons Cos. Inc. Report, as well restaurant suppliers Sysco and US Foods (USFD) - Get US Foods Holding Corp. Report.
A sale of Sanderson to Continental, which owns poultry producer Wayne Farms, would create a company representing about 15% of the U.S. chicken production market, the report said. The chicken industry's top producer Tyson Foods (TSN) - Get Tyson Foods, Inc. Class A Report holds about 20% of the market, while Pilgrim's Pride (PPC) - Get Pilgrim's Pride Corporation Report has about 16%.
Shares of Sanderson on Friday closed up 0.6% to $182.37.