Pilgrim's Pride Corp. (Nasdaq: PPC) confirmed that on June 1, 2014, it submitted a revised proposal to acquire The Hillshire Brands Co. (NYSE: HSH) for $55.00 per share in cash in a transaction valued at $7.7 billion. The proposal represents an increase of $1.3 billion versus Pilgrim's initial proposal, and a 49 percent premium over Hillshire's share price one day prior to the announcement of its transaction with Pinnacle Foods Inc. (NYSE: PF). Pilgrim's revised proposal is not subject to any financing conditions or contingencies.
Pilgrim's is confident the transaction is strategically and financially compelling, and creates considerable value for the shareholders of both Pilgrim's and Hillshire. Pilgrim's anticipates run-rate cost synergies in excess of $300 million annually to come from operational and value-chain efficiencies and, in addition, significant growth opportunities in higher margin branded products, both in North America and internationally. Pilgrim's expects the increased cash flow from the combined company and the realization of synergies will allow it to rapidly pay down the initial acquisition debt. Pilgrim's projects the combination to be immediately accretive to earnings due to these significant synergies and the availability of attractive financing terms.
Lazard is acting as financial advisor to Pilgrim's and Cravath, Swaine & Moore LLP is acting as its legal counsel.