Hillshire Farm, the cold cut, sausage, and hot dog maker known for brand names like Ball Park and Jimmy Dean, is close to a complete acquisition by Tyson Foods according to an MSN Money publication on June 9, 2014.
Tyson Foods found itself in a bidding war for Hillshire Farm and initially offered $50 per share. Its offer was topped by Pilgrim’s Pride which offered $55 per share. Tyson then responded with a $63 per share offer to win the right to purchase Hillshire Farms in a multi- billion dollar deal. Pilgrim’s Pride dropped out of the deal at that point.
Hillshire Farms, a Chicago based operation and owner of several popular trademark names, has one obstacle to clear before Tyson can complete the deal. The problem relates to Pinnacle Foods, a company best known for its Wish Bone salad dressing and Birds Eye frozen vegetables. Hillshire Farms made a bid of its own to acquire Pinnacle Foods for $4.23 billion. It will have to drop this offer before the Tyson deal can go through.
"There can be no assurance that any transaction will result from the Tyson Foods offer," Hillshire said in a public statement.
With approximately 123 million shares outstanding, Hillshire Farms price tag, based on Tyson Food’s $63 per share offer, is about $7.75 billion. Tyson Foods and Pilgrim’s Pride both see great value in Hillshire Farms based on its highly recognizable brands such as Jimmy Dean and the above average profitability of breakfast sandwiches and other convenience foods. The deal, if it works out, will greatly increase Tyson Food’s presence in supermarkets across the United States.
Tyson Food’s offer will remain on the table until December 12, 2014, the last day that the Pinnacle deal can be ended.