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Hillshire Brands to talk to Pilgrim's Pride and Tyson Foods separately on takeover bid

The bidding war for Hillshire Brands is a heated one with Tyson increasing its offer last week and Pilgrim's following suit.

By Ananth Baliga
Hillshire Brands to talk to Pilgrim's Pride and Tyson Foods separately on takeover bid
Hillshire Brands apart from having to deal with to competitive suitors is also in the middle of its own takeover of Pinnacle Foods. (CC: Jason Lee)

CHICAGO, June 3 (UPI) -- The Hillshire Brands board said Tuesday it will initiate talks with both Tyson Foods and Pilgrim's Pride, after the latter upped its takeover bid by $10 to $55 a share.

The maker of Jimmy Dean sausage and Sara Lee desserts has been caught in the middle of a bidding war with Tyson and Pilgrim's upping each other's bids. Pilgrim's Pride, a unit of Brazilian meat company JBS SA, had initially offered $45 a share, which was topped by Tyson with a $50 a share bid. Tuesday's offer of $55 a share sent Hillshire's stock price up by 8 percent to $58.15, above the latest offer from either pursuer.

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Pilgrim's offer is now worth $6.75 billion, with the Hillshire board saying that it wasn't making any recommendations at the moment and that it would communicate with both companies before taking a call. For its part, Pilgrim said that it felt the offer was "strategically and financially compelling."

Tyson is currently the country's top chicken processor, but a deal with Hillshire would help Pilgrim's become more competitive with Tyson in the broader meat market.

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Another complication in the deal is Hillshire's bid to buy Pinnacle Foods for $4.3 billion, while also agreeing to pay $163 million if the deal doesn't go through. Hillshire's board has said that it isn't "withdrawing, modifying, withholding or qualifying its recommendation" regarding its bid for Pinnacle.

"Hillshire Brands does not have the right to terminate the Pinnacle Foods merger agreement on the basis of either of these proposals or enter into an alternative acquisition agreement with either of these parties prior to termination," the company said in a release. "There can be no assurance that any transaction will result from these proposals."

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