NEW YORK (The Deal) -- Pilgrim's Pride (PPC) on Tuesday sweetened its offer for Hillshire Brands (HSH) to $7.7 billion in cash, trumping a rival bid by Tyson Foods (TSN) in the battle to bring the maker of Jimmy Dean sausages to the table.
Greeley, Colo.-based Pilgrim's Pride said it latest offer is $55 per share in cash, $1.3 billion - or $10 per share - above its original unsolicited bid announced late last month. Tyson Foods joined the fray days later, offering $50 per share for Chicago-based Hillshire.
Pilgrim's Pride said its latest proposal is not subject to any financing conditions or contingencies. The company said even at the higher price it still believes the purchase makes sense for its shareholders, noting that it anticipates being able to extract upwards of $300 million in annual costs from the combination and to use the increased cash flow the deal would generate to quickly pay down acquisition debt.
The fight for Hillshire is a battle of two of the world's largest protein producers. Tyson is the planet's second-largest meat processor behind Pilgrim's Pride majority owner JBS of Brazil. Another large producer, Shuanghui International Holdings-owned Smithfield Foods so far has been silent, as has smaller producers including Perdue Farms Inc. and Cargill Inc.
Hillshire, which has a separate $6.6 billion deal pending to acquire Pinnacle Foods (PF), in a statement said it intends to hold talks with both Pilgrim's Pride and Tyson. The company said it was not withdrawing or modifying its Pinnacle merger agreement. Both Pilgrim's Pride and Tyson had pushed for that deal to be scuttled.