Pilgrim's Pride Corp has sent a proposal to Gold Kist Inc offering to purchase all of the outstanding shares of Gold Kist common stock for $20 per share in cash. The transaction is valued at about $1 billion, plus the assumption of Gold Kist's debt of $144 million. Pilgrim's Pride's offer represents a premium of approximately 55% over Atlanta GA-based Gold Kist's closing stock price of $12.93 as of Aug 18, 2006.
"We believe the combination of Pilgrim's Pride and Gold Kist will create the world's leading chicken producer and result in substantial value creation for our respective shareholders, employees, business partners, and other constituencies," said O B Goolsby Jr, president and chief executive officer of Pittsburg TX-based Pilgrim's Pride.
Here is an excerpt from Gold Kist's statement in response:
"Since February 2006, while the poultry markets and our stock price have been depressed, Pilgrim's has made two opportunistic proposals to acquire the company. After careful consideration by our board of directors and with the advice of our outside legal counsel and our financial advisor, these proposals were rejected. In June, Pilgrim's made an additional proposal to the board of directors. Although this proposal was unacceptable as presented to the board and we have great confidence in our strategy as an independent company, our board always considers opportunities to maximize stockholder value. To this end, in July we met with Pilgrim's to explore their unsolicited proposal and have expressed our willingness to consider limited reciprocal due diligence subject to an appropriate confidentiality agreement. We were therefore surprised and disappointed that Pilgrim's chose to make public its unsolicited proposal at this time.
"The board plans to carefully examine this proposal and has designated a committee to consider our strategic plans and potential alternatives to maximize stockholder value."