Hillshire Brands (HSH) Soars on Takeover Bid

Shares of Chicago, IL, based Hillshire Brands Company (HSH) soared on Tuesday on a buyout bid from Pilgrim's Pride (PPC). The stock was up $8.17 per share, or 22.07%, to close at $45.19, on volume of 41,656,963 shares. The stock closed near it's 52 week high. In a surprise bid, Pilgrim's Pride made a $5.5 billion offer for the company.

The bid cast doubt on Hillshire's own plan to acquire Pinnacle Foods Inc (PF), announced earlier this month.
The Hillshire Brands Company produces meat products for the retail and foodservice markets. The retail segment offers a variety of packaged meats and frozen bakery products throughout North America. The company provides its products and services to foodservice distributors, restaurants, hospitals and other large institutions. It offers it's well-known brands for sale, including its namesake, Hillshire Farm, as well as Jimmy Dean sausage, Ballpark Franks, Sara Lee and Aidells. For 2013 the company had a net income of $184 million on sales of $3.92 billion, and has 9,100 employees. The buyout offer by Pilgrim's Pride, one of the largest chicken producers in the country, came as a surprise to the market and to the company. Under the terms of the offer, Pilgrim's Pride will acquire Hillshire's stock at a price of $45 per share in cash. The total value of the buyout offer is $5.5 billion. According to Ken Goldman at J.P. Morgan (JPM), "From a financial basis, we think PPC-HSH would bring many more synergies than would HSH-PF, primarily because putting two meat companies together likely would generate sales/marketing efficiencies, back office consolidation, and supply chain benefits..."

Published on May 28, 2014
By Kevin Mercadante

Copyrighted 2020. Content published with author's permission.

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