The Bidding War For Hillshire Brands (HSH) Is Over As Tyson Foods (TSN) Outbids Rival

U.S. meat giant Tyson Foods (TSN) has struck a deal to acquire Hillshire Brands Co. (HSH), offering almost a billion dollars more than rival Pilgrim’s Pride Corp. (PPC)’s bid last week, according to a report Sunday in MarketWatch.

Citing people familiar with the matter, the publication claims that Tyson offered $63 in cash per share, a bid that valued the Jimmy Dean maker at around $7.7 billion. Terms weren’t immediately available.

Pilgrim’s Pride, a unit of Brazilian meatpacking giant JBS SA, set off the bidding war late last month by making an unsolicited offer for the Chicago-based Hillshire for $55 per share, valuing it at $6.7 billion including debt. Tyson’s new offer represents a roughly 70% premium to Hillshire’s valuation before the bidding began.

The offers from Tyson and Pilgrim’s Pride came after Hillshire said last month it had planned to buy Pinnacle Foods Inc (PF) in a deal valued at $4.3 billion, excluding debt.

The two offers required Hillshire to terminate its acquisition efforts with Pinnacle.

Tyson said merging with Hillshire would “reposition Tyson as a clear leader in the retail sale of prepared foods,” as well as a bigger player in the fast-growing breakfast category, “where Tyson has little presence today.”

“We believe that there is a strong strategic, financial and operational rationale for the combination of Tyson and Hillshire,” Tyson chief executive Donnie Smith said last month.

Shares of Hillshire rose 25 cents, or 0.43%, to $58.92 on June 6, giving it a market cap of  $7.23 billion. Hillshire’s stock has spiked more than 60% since the bidding began nearly a month ago.

TSN closed at $40.12 on Friday.

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