NEW YORK (TheStreet) -- Hillshire Brands (HSH) stock is gaining in pre-market trading after Pilgrim's Pride Corporation (PPC) proposed an acquisition for $45 per share in an all-cash transaction valued at $6.4 billion.
The proposal represents a 25% premium to Hillshire shares over the previous 10 trading days. Pilgrim's noted the proposed transaction would likely close in the third quarter of 2014 and would void Hillshire's merger agreement with Pinnacle Foods (PF). A combined company would have combined revenue of $12.4 billion and EBITDA of $1.4 billion.
Before market open, shares were spiking 21.1% to $44.82.
TheStreet Ratings team rates HILLSHIRE BRANDS CO as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HILLSHIRE BRANDS CO (HSH) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows: