Smithfield Foods and Premium Standard Farms Agree to Merger
18 Septiembre 2006 - 7:00AM
PR Newswire (US)
- Premium Standard Farms Shareholders to Receive 0.678 Shares in
Smithfield Stock and $1.25 in Cash For Each Premium Standard Farms
Share - SMITHFIELD, Va., Sept. 18 /PRNewswire-FirstCall/ --
Smithfield Foods, Inc. (NYSE:SFD) and Premium Standard Farms, Inc.
(NASDAQ:PORK) today announced that their Boards of Directors have
unanimously approved a definitive merger agreement under which
Smithfield Foods ("Smithfield") will acquire all of the outstanding
shares of Premium Standard Farms ("PSF") through a merger. Under
the terms of the merger, each PSF share will be converted into the
right to receive 0.678 Smithfield shares plus $1.25 in cash. The
total combined value of stock and cash is $21.35, based on
Smithfield's average closing price on the New York Stock Exchange
over the most recent 10-day trading period. The share exchange
portion will be tax-free to PSF shareholders. The agreement has a
total transaction value of approximately $810 million, including
the assumption of PSF's approximately $117 million of net debt.
Smithfield and PSF stated that ContiGroup Companies, Inc.
("ContiGroup"), which owns 38.8 percent of PSF's stock, has signed
a shareholder support agreement committing to vote its PSF shares
in favor of the transaction. The transaction is expected to close
in the first calendar quarter of 2007. PSF has approximately 32.0
million shares outstanding. Smithfield will issue approximately
21.9 million shares in exchange for PSF shares. Smithfield stated
that it expects the transaction to be accretive to its earnings per
share following closing. In connection with this transaction: --
All current PSF hog production contracts will be honored, giving
PSF's independent hog producers the certainty and security of
contractual supply relationships; and -- Smithfield will remain
committed to purchasing significant numbers of hogs on the open
market; and -- PSF's facilities will remain open and in operation
at least at current production levels, continuing to serve their
customers. For the twelve months period ended at the June 24, 2006
close of PSF's fiscal first quarter, PSF had net sales of $880
million and net income of $45.3 million. "We are excited about the
combination of PSF and Smithfield," said C. Larry Pope,
Smithfield's President and Chief Executive Officer. "This is a
business we know very well and it relates directly to our core
competence. We have strong expertise in both live hog production
and in fresh pork processing. Strategically, this is a very good
long-term fit and near-term, this combination should generate
benefits for both organizations and our customers," Mr. Pope said.
John M. Meyer, PSF's President and Chief Executive Officer, stated,
"Our agreement to merge with Smithfield enables PSF's shareholders
to receive an immediate premium for their shares and continue to
participate in the growth of Smithfield, a well-capitalized company
with one of the best records of creating long-term shareholder
returns of any company in any industry. As part of Smithfield, we
will continue to execute our strategy and provide attractive
opportunities for our employees, our customers, our hog producers,
and the communities in which we live and work." Paul J. Fribourg, a
Director of PSF and Chairman, President and Chief Executive Officer
of ContiGroup, PSF's major shareholder, stated, "We are very
pleased to support the combination of PSF with Smithfield, and we
look forward to continuing to participate in the growth of the
combined company." The transaction will require customary
regulatory approvals as well as the approval of PSF's shareholders.
Centerview Partners, LLC is serving as financial advisor to Premium
Standard Farms in connection with this transaction. Sidley Austin
LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are
serving as counsel to Premium Standard Farms with respect to this
transaction. Simpson Thacher & Bartlett LLP and McGuire Woods
LLP are serving as counsel to Smithfield in connection with this
transaction. Investment Community Conference Call Smithfield will
conduct a brief conference call at 8:30 a.m. ET today to discuss
its agreement. This call can be accessed at 800-762-4717 or via the
Internet at http://www.smithfieldfoods.com/. About Smithfield, Inc.
Smithfield has delivered a 24 percent average annual compounded
rate of return to investors since 1975. With sales of $11 billion,
Smithfield is the leading processor and marketer of fresh pork and
processed meats in the United States, as well as the largest
producer of hogs. For more information, visit
http://www.smithfieldfoods.com/. About Premium Standard Farms, Inc.
PSF is one of the largest vertically integrated providers of pork
products in the United States, producing consistent, high quality
pork products for the retail, wholesale, foodservice, export, and
further processor markets. PSF is the nation's second largest pork
producer and sixth largest pork processor, with approximately 4,300
employees working at farms and processing facilities in Missouri,
North Carolina, and Texas. This filing contains "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements include, but are not limited
to, statements relating to anticipated financial and operating
results, the companies' plans, objectives, expectations and
intentions and other statements including words such as
"anticipate," "believe," "plan," "estimate," "expect," "intend,"
"will," "should," "may," and other similar expressions. Such
statements are based upon the current beliefs and expectations of
Smithfield Foods, Inc.'s and Premium Standard Farms, Inc.'s
management and involve a number of significant risks and
uncertainties. Actual results may differ materially from the
results anticipated in these forward-looking statements. The
following factors, among others, could cause or contribute to such
material differences: the risk that governmental approvals of the
transaction will not be obtained on the proposed terms and schedule
or at all or will only be obtained following the imposition of
adverse conditions; the failure to obtain stockholder approval; the
risks that Smithfield's and PSF's businesses will not be integrated
successfully; the risk that Smithfield and PSF will not realize
estimated cost savings and synergies; costs relating to the
proposed transaction; disruption from the transaction making it
more difficult to maintain relationships with customers, employees
or suppliers; the availability and pricing of hogs, feed and other
products necessary to our business; fluctuations in pricing of our
products, the competitive environment and related market
conditions; increased regulation and related litigation; possible
effects on products of disease outbreaks; access to capital; and
actions of domestic and foreign governments. Additional factors
that could cause Smithfield's and PSF's results to differ
materially from those described in the forward-looking statements
can be found in the 2006 Annual Report on Form 10-K of Smithfield
and the 2006 Annual Report on Form 10-K of PSF filed with the
Securities and Exchange Commission (the "SEC") and available at the
SEC's Internet site (http://www.sec.gov/). Neither Smithfield nor
PSF undertakes any obligation to update any forward- looking
statements to reflect circumstances or events that occur after the
date on which such statements were made. This communication is
being made in respect of the proposed merger transaction involving
Smithfield Foods, Inc., Premium Standard Farms, Inc. and KC2 Merger
Sub, Inc. In connection with the proposed transaction, Smithfield
will file with the SEC a registration statement on Form S-4 and PSF
will mail a proxy statement/prospectus to its stockholders, and
each will be filing other documents regarding the proposed
transaction with the SEC as well. Before making any voting or
investment decision, investors are urged to read the proxy
statement/prospectus regarding the proposed transaction and any
other relevant documents carefully in their entirety when they
become available because they will contain important information
about the proposed transaction. The final proxy
statement/prospectus will be mailed to PSF's stockholders.
Stockholders will be able to obtain a free copy of the proxy
statement/prospectus, as well as other filings containing
information about Smithfield and PSF, without charge, at the SEC's
Internet site (http://www.sec.gov/). Copies of the proxy
statement/prospectus and the filings with the SEC that will be
incorporated by reference in the proxy statement/prospectus can
also be obtained, without charge, by directing a request to
Smithfield Foods, Inc., 200 Commerce Street, Smithfield, Virginia,
Attention: Investor Relations (212) 758-2100, or to PSF, 805
Pennsylvania Avenue, Suite 200, Kansas City, Missouri 64105
Attention: Investor Relations (816) 472-7676. Smithfield, PSF and
their respective directors and executive officers and other persons
may be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction. Information regarding
Smithfield's directors and executive officers is available in
Smithfield's proxy statement for its 2006 annual meeting of
stockholders and Smithfield's 2006 Annual Report on Form 10-K,
which were filed with the SEC on July 31, 2006 and June 30, 2006,
respectively, and information regarding PSF's directors and
executive officers is available in PSF's proxy statement for its
2006 annual meeting of stockholders and PSF's 2006 Annual Report on
Form 10-K, which were filed with the SEC on July 21, 2006 and May
31, 2006, respectively. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the proxy statement/prospectus and other
relevant materials to be filed with the SEC when they become
available. Contacts: For Smithfield: For Premium Standard Farms:
Investors: Steve Lightstone Jerry Hostetter Premium Standard Farms,
Inc. Smithfield Foods, Inc. (816) 472-7675 (212) 758-2100 Media:
Adam Weiner or Scott Hynes Kekst and Company (212) 521-4800
DATASOURCE: Smithfield Foods, Inc. CONTACT: Jerry Hostetter of
Smithfield Foods, Inc., +1-212-758-2100; Steve Lightstone of
Premium Standard Farms, Inc., +1-816-472-7675; Adam Weiner or Scott
Hynes both of Kekst and Company, +1-212-521-4800, for Smithfield
Foods, Inc. Web site: http://www.smithfieldfoods.com/
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