Gold Kist 'surprised and disappointed' by Pilgrim's Pride
Gold Kist will 'carefully examine' an acquisition proposal from
poultry processor Pilgrim's Pride, in spite of being 'surprised and
disappointed' that Pilgrim announced the proposal
Gold Kist shares soared on the first
day of trading after the proposal was made.
In a news release, Gold Kist indicated that Pilgrim's Pride has
made two other acquisition proposals since February, that were rejected. The
statement reads: "In July we met with Pilgrim's to explore their [third]
unsolicited proposal and have expressed our willingness to consider limited
reciprocal due diligence subject to an appropriate confidentiality agreement. We
were therefore surprised and disappointed that Pilgrim's chose to make public
its unsolicited proposal at this time."
Pilgrim's Pride has offered to buy all of the outstanding shares of Gold Kist
for $20 per share in cash. The transaction is valued at approximately $1
billion, plus the assumption of Gold Kist's debt of $144 million. Pilgrim's said
the proposal offered Gold Kist shareholders a cash premium of approximately 55
percent for their shares (based on trade figures the day the proposal was
"We believe the combination of Pilgrim's Pride and Gold Kist will create the
world's leading chicken producer and result in substantial value creation for
our respective shareholders, employees, business partners and other
constituencies," said O B Goolsby Jr, Pilgrim's president and chief executive
officer. "The combined company will maintain a balanced portfolio of fresh
chicken and value-added products and expand its geographic reach and customer
Gold Kist shares closed yesterday at $19.02 on the Nasdaq, up by $6.09.
Pilgrim's Pride shares closed at $24.97 on the New York Stock Exchange, up
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