Survey: Who Will Win The Hillshire Bidding War?
Shares of Hillshire Brands (NYSE: HSH) are once again shooting higher.
Pilgrim’s (NASDAQ: PPC) announced a $55 per share ($7.7 billion total) bid for Hillshire on Monday. This is the third bid in two weeks for Hillshire; Pilgrim’s original bid for $45 was outdone by Tyson Foods (NYSE: TSN) at $50.
Shares of Hillshire are up almost nine percent in Tuesday's pre-market.
Previous to the struggle between Pilgrim’s and Tyson, Hillshire had committed to buying Pinnacle Foods (NYSE: PF), adding an additional layer of complexity. Hillshire’s $6.6 billion acquisition of Pinnacle will be terminated if the firm is acquired and a $163 million penalty will be paid.
Pilgrim’s also disclosed that it expects synergies to save $300 million per year. The increased cash flow will allow Pilgrim’s to quickly pay down the debt used in the acquisition. Lazard is acting as the financial advisor.
The $55 bid is 49 percent above Hillshire’s share price when it announced the deal with Pinnacle foods. Hours after the Pilgrim’s initial offer was announced, Hillshire’s board replied that they would consider the offer, but that, “We continue to strongly believe in the strategic merits and value creation potential provided by the proposed transaction with Pinnacle Foods.”
What Do You Think?
Prior to the $55 offer, Benzinga readers expected the final acquisition price to fall between $55 and $60. Seventy-one percent of readers expected Tyson to be the final acquirer.
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