Pinnacle Foods Weighing Options On Hillshire Deal: Reports

(RTTNews) - Pinnacle Foods Inc. (PF) is said to be reportedly weighing its options before allowing Hillshire Brands Co. (HSH) to terminate its deal to acquire the company.

Earlier, Wall Street Journal citing people familiar with the matter, reported that Pinnacle Foods is considering its options before allowing Hillshire Brands to terminate its deal to buy Pinnacle and go forward with the merger with Tyson Foods Inc. (TSN).

Pinnacle is considering whether to ask more money from Hillshire as break-up fee or force the company to follow through with their deal. Hillshire is currently trying to terminate the $6.6 billion deal to acquire Pinnacle after Tyson Foods offered to buy Hillshire for about $8.55 billion, including debt. Hillshire will have to pay a termination fee of $163 million.

In early May, Hillshire agreed to buy Pinnacle Foods, the maker of Birds Eye frozen foods, Duncan Hines baking mixes and frostings, and Vlasic shelf-stable pickles, in a cash and stock transaction with a total enterprise value of $6.6 billion.

However, in late May, Pilgrim's Pride (PPC), a unit of Brazilian meat giant JBS SA, made an unsolicited bid to buy Hillshire for $45 a share in cash. Meat producer Tyson Foods soon proposed to acquire Hillshire for $50 per share, and on June 1, Pilgrim's raised its offer to $55 per share. However, on Monday, Pilgrim's Pride withdrew its offer after Tyson sweetened its bid for the maker of Jimmy Dean sausages and Ball Park hot dogs to $63 per share, valuing the offer at about $8.55 billion, including debt.

Both Pilgrim's and Tyson had insisted that Hillshire should abandon the Pinnacle deal if the merger had to take place.

Meanwhile, according to people close to Pinnacle suggest that the company might try to get more from Hillshire as break up fee.

PF closed Wednesday's trading at $32.06, up $0.58 or 1.84%, on the NYSE. HSH closed trading at $61.91, up $0.06 or 0.10%.