Gold Kist board rejects Pilgrim's Pride's offer
The board of Gold Kist has rejected a $1.03 billion
hostile takeover bid from rival Pilgrim's Pride, and has also filed a lawsuit to
stop Pilgrim's from adding its own officers to Gold Kist's
According to a Gold Kist
the $20-per-share buyout offer by Pilgrim's Pride
, the nation's second-largest chicken producer,
is inadequate and not in the best interest of Gold Kist shareholders.
â€œOur Board unanimously determined that the offer is inadequate and does not
fully reflect the value of Gold Kist, including the Company's strong market
position and future growth prospects,â€ said John Bekkers, Gold Kist President
and CEO. â€œWe have successfully positioned ourselves to take advantage of
attractive growth opportunities in key markets and are confident in our
Gold Kist said it made its decision after consulting with its
financial and legal advisers and its special committee of independent
The company also said it has filed a lawsuit in federal court in Atlanta
seeking to stop Pilgrim's Pride from asking Gold Kist shareholders to vote for
its own slate of directors.
Pilgrim's Pride responded by saying it was disappointed in the Gold Kist
board's recommendation. â€œThe board's recommendationâ€¦has failed to recognise both
the value our offer affords Gold Kist's stockholders and the opportunity
presented to employees and contract growers.
â€œFor Gold Kist stockholders in particular, the transaction's benefits are
reflected in the price we have offered, which represents a premium of 55% over
Gold Kist's closing stock price on August 18, 2006, the last day of trading
before Pilgrim's Pride notified Gold Kist's board of directors in a public
letter that it was offering $20 per share in cash for the company.
â€œFurthermore, we intend to vigorously defend the lawsuit filed in Federal
Court in the Northern District of Georgia."
Pilgrim's Pride's tender offer is scheduled to expire at midnight, New York
City Time, on Friday, October 27, 2006, unless extended.
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