Pilgrim's Pride Boosts Hillshire Brands Offer To $7.7 Bln To Top Tyson's

(RTTNews) - Chicken products maker Pilgrim's Pride Corp. (PPC), a unit of Brazilian meat giant JBS SA, Tuesday confirmed that it has submitted a revised proposal to acquire Hillshire Brands Co. (HSH) for $55 per share cash, in an offer valued at $7.7 billion. Earlier offer was $45 per share.

The revised proposal represents an increase of $1.3 billion compared to Pilgrim's initial proposal, and tops Tyson Foods, Inc. (TSN) offer to acquire Hillshire for $6.8 billion.

Pilgrim's expects the combination with Hillshire to result in annual cost synergies in excess of $300 million, and to be immediately accretive to earnings per share.

The revised proposal represents 49 percent premium over Hillshire's share price one day prior to announcement of its transaction with Pinnacle Foods Inc. (PF).

It was on May 27, that Pilgrim's Pride announced a proposal to acquire Hillshire for $45 per share in cash, in a transaction valued at $6.4 billion. Pilgrim's said at that time that its all-cash proposal provides Hillshire shareholders with a substantially superior alternative to Hillshire's pending acquisition of Pinnacle Foods.

Meanwhile, two days after Pilgrim's offer, Tyson Foods proposed to acquire Hillshire for $6.8 billion.

Chicago-based Hillshire has more than 9,000 employees. It generated about $4 billion in annual sales in fiscal 2013.

Pilgrim's expects annual run-rate cost synergies to exceed $300 million to come from operational and value-chain efficiencies. In addition, it sees significant growth opportunities in higher margin branded products, both in North America and worldwide.

The firm anticipates that the increased cash flow from the combined company and the realization of synergies would allow it to rapidly pay down the initial acquisition debt.

Pilgrim's stated that its revised proposal is not subject to any financing conditions or contingencies.

Hillshire, the maker of products under brand names including Jimmy Dean, Ball Park, Sara Lee, announced separately that it will hold separate talks with Pilgrim's Pride and Tyson Foods.

Lazard is acting as financial advisor to Pilgrim's and Cravath, Swaine & Moore LLP, as its legal counsel.

PPC closed Monday's regular trading at $25.92, up 1.89 percent.