Gold Kist accepts an extra dollar per share
Pilgrim's Pride and Gold Kist have announced that the
two companies have entered into a definitive merger agreement under which
Pilgrim's Pride will acquire all of the outstanding shares of Gold Kist common
stock for $21.00 per share in cash.
The transaction, which is valued at US$1.1 billion
(plus the assumption of approximately $144 million of Gold Kist's
result in the creation of the world's largest chicken producer.
"After careful consideration, the special committee of
independent directors, as well as our entire board, determined that the Pilgrim's Pride
enhanced offer is in the best interests of our shareholders, employees, growers
and customers," said AD Frazier, chairman of Gold Kist.
"This is a momentous day for both companies and for
the chicken industry," said Lonnie "Bo" Pilgrim, chairman of Pilgrim's Pride.
"We believe the combination of these two great companies will result in
substantial value creation for our respective stockholders, employees, business
partners and other constituencies."
O B Goolsby Jr, Pilgrim's Pride president and chief
executive officer added: "We are excited about the opportunity to begin
realising the substantial benefits that will result from the combination between
Pilgrim's Pride and Gold Kist. The combined company will be well-positioned to
provide even better service to its customers."
Pilgrim's Pride expects to achieve approximately $50
million in savings each year, primarily from the optimisation of production and
distribution facilities and cost savings in purchasing, production, logistics
The Pilgrim's Pride offer represents an approximately
62 percent premium over Gold Kist's closing stock price on 18 August 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 to purchase the company.
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