Pilgrim’s Pride completes tender offer

29-12-2006 | |
Pilgrim’s Pride completes tender offer

Pilgrim’s Pride expects to complete the acquisition of rival poultry producer Gold Kist in the New Year, after 88.9 percent of Gold Kist shareholders tendered their stock prior to the tender offer closing on Wednesday.

Pilgrim’s Pride offered $21 in cash for each share after its initial offer of $20 was not successful.
The 88.9 percent of shares tendered equates to a total of 45,343,812 shares of Gold Kist common stock. All shares validly tendered and not properly withdrawn prior to the expiration of the offer have been accepted for payment by Pilgrim’s Pride.
“The completion of this tender offer is a significant milestone for Pilgrim’s Pride,” said O B Goolsby Jr, Pilgrim’s Pride president and chief executive officer. “We look forward to beginning 2007 as a much stronger company, with industry-leading market share, a broad and growing customer base and a balanced portfolio of fresh chicken and value-added products. We are now ready to begin realizing the compelling strategic value and benefits we envisioned from this acquisition and look forward to setting a new standard in the chicken industry.”
Pilgrim’s Pride has commenced the subsequent offering period for all remaining shares that have not yet been tendered. The new offer period will expire at 5 pm, New York City Time, on Friday 5 January 2007, unless extended.
As previously announced, Pilgrim’s Pride and Gold Kist entered into a definitive merger agreement on 3 December 2006, under which Pilgrim’s Pride agreed to acquire all of the outstanding shares of Gold Kist common stock for $21.00 per share in cash.
The transaction was unanimously approved by the boards of directors of both Pilgrim’s Pride and Gold Kist and has a total equity value of approximately $1.1 billion, plus the assumption or refinancing of approximately $144 million of Gold Kist’s debt. Following the merger, Gold Kist will be a wholly owned subsidiary of Pilgrim’s Pride.
Pilgrim’s Pride said the deal would make it the largest chicken producer in the United States and Puerto Rico and the second-largest producer and seller of chicken in Mexico. Tyson Foods, which also has large beef and pork operations, has $26 billion in annual revenue, compared to $7.4 billion for Pilgrim’s Pride and Gold Kist.
In trading Thursday on the New York Stock Exchange, shares of Pilgrim’s Pride rose 29 cents to close at $29.54. Gold Kist shares were unchanged at $20.99 on the Nasdaq Stock Market.