Pilgrim's Pride makes bid for Goldkist
Pilgrim's Pride has issued a letter of intent to acquire all of the
outstanding equity of Gold Kist in a $20/share cash transaction plus assumption
of debt. The offer represents a 55% premium over the Gold Kist closing
price of $13.
The acquisition, if completed, would boost Pilgrim's Pride to
a total weekly output of 43 million birds/week, contributing to 79,000 metric
tons of processed product or 25% of the US market. This would exceed the current
leader, Tyson Foods
which holds a dominant 23% market share of 68,000 metric tons/week derived from
42 million birds processed in 39 plants.
The offer signed by Lonnie "Bo" Pilgrim, Chairman of Pilgrim's Pride,
addressed to the Board of Gold
Kist, outlined strategic advantages from the acquisition including
expanded geographic reach, enhancing customer service, economies of scale
and providing security for the 3,200 Gold Kist contractors and 16,000
Pilgrim's Pride has extensive experience in acquisition and successful
integration of producing assets following purchase of WLR Foods in 2001 and the
ConAgra broiler operations in 2003/04.
Gold Kist currently produces 14 million broilers with an average live weight of
2.55 kg each week and is the third largest integrator in the USA with a market
share of 8.7%, based on the output from operations in Georgia, Alabama, Florida,
and the Carolinas. As of July 1st 2006, Gold Kist had a total asset
value of $890 million with total liabilities of $456 million including long term
debt of $142 million.
Pilgrim's Pride is the second largest broiler producer in both the USA and in
Mexico, with a US volume of 29 million birds/week with an average live weight of
2.26 kg representing 16% of national production.
To comment, login here
Or register to be able to comment.