Boston, MA 05\/27\/2014 (wallstreetpr) \u2013\u00a0Marketer of food products, Hillshire Brands Co (NYSE:HSH)<\/b>, is surging in early-morning trading session after Poultry producer Pilgrim\u2019s Pride announced plans to acquire it for 5.7 billion. The acquisition price is inclusive of any debts that Hillshire Brands might have and represents a 22% increase over its closing price on Friday.<\/p>\n
Pilgrim Planning to Expand into Branded Products<\/b><\/p>\n
Hillshire Brands Co (NYSE:HSH) <\/b>has over the years been seen as a potential acquisition candidate after being spun by conglomerate Sara Lee spun. The company known for its brands Jimmy Dean Sausage and Ball Park Hot dogs is also thought to have been beefing up with its own acquisition’s. Acquiring Hillshire Brands will essentially allow Pilgrim\u2019s Pride expand its business to the lucrative branded food category.<\/p>\n
Pilgrims 80% sales come from fresh poultry produce with the remaining 20% coming from prepared foods. The valuation of Hillshire Brands essentially provides its shareholders with a substantial premium with greater certainty and immediate cash value for the shares. Pilgrim\u2019s is now putting its fingers crossed awaiting to see Hillshire Brands board of directors response, as well as majority shareholders.<\/p>\n
Hillshire Brands Co (NYSE:HSH) <\/b>has over the years been trying to transform itself while expanding into the broader portfolio of meat and other foods. Earlier in the month the company planned to acquire Pinnacle foods Inc., for about $4.3 billion in cash and stock. The bid price also takes into consideration Pinnacle\u2019s debt that nearly amounts to $2.4 billion.<\/p>\n
Bid Could Rise to $6.39 Billion<\/b><\/p>\n
Pilgrim\u2019s bid price of $45 a share assumes a value of roughly $5.67 billion with a net debt of $553 million. Terms of the deal also involve Pilgrim\u2019s paying a total of $163 million as termination fee, for Hillshire Brands Co (NYSE:HSH) <\/b>to break from its deal with Pinnacle. Taking into consideration all transaction costs,’ the deal could rise to as much as $6.39 billion.<\/p>\n
Pilgrims plans to finance the deal if accepted with cash and third party financing. Pilgrims has reiterated that its proposal has unanimous support of its Board of directors as well as its majority stockholder JBS SA. The deal once closed will result in merged companies with $12.4 billion worth of sales.<\/p>\n","protected":false},"excerpt":{"rendered":"
Boston, MA 05\/27\/2014 (wallstreetpr) \u2013\u00a0Marketer of food products, Hillshire Brands Co (NYSE:HSH), is surging in early-morning trading session after Poultry producer Pilgrim\u2019s Pride announced plans […]<\/p>\n","protected":false},"author":12,"featured_media":22114,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"twitter_2902945987_2902945987":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[2236],"tags":[6322,6323],"stock_ticker":[],"class_list":["post-23713","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-hillshire-brands-co-nysehsh","tag-nysehsh","entry"],"acf":[],"yoast_head":"\n