Gold Kist board rejects Pilgrim’s Pride’s offer

16-10-2006 | |

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 board.

According to a Gold Kist statement, 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.
“Our 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,” said John Bekkers, Gold Kist President and CEO. “We have successfully positioned ourselves to take advantage of attractive growth opportunities in key markets and are confident in our prospects.”
Gold Kist  said it made its decision after consulting with its financial and legal advisers and its special committee of independent directors.
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. “The board’s recommendation…has failed to recognise both the value our offer affords Gold Kist’s stockholders and the opportunity presented to employees and contract growers.
“For 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.
“Furthermore, 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.