Smithfield Foods, Inc. (NYSE: SFD) announced yesterday that it has received a letter from the Special Committee of the Board of Directors of IBP, Inc., in which the Committee wrote: "Please be assured that the Special Committee is fully committed to the objective of maximizing value for the IBP shareholders ... the Special Committee has determined that your proposal meets the applicable threshold under IBP's merger agreement with Rawhide Holdings Corporation [the management buyout group] and is therefore prepared to enter into discussions with you regarding your proposal."The letter comes in response to Smithfield's offer to acquire IBP, Inc. through a tax-free merger in which IBP shareholders would receive $25 per share payable in Smithfield Foods common stock at an exchange ratio based on the average price of Smithfield Foods shares for a period prior to the closing. Smithfield's offer represents a significant premium to the proposed management buyout of IBP at $22.25 per share.IBP's Special Committee also stated in its letter that it is "happy to accommodate" Smithfield's request for a brief confirmatory due diligence review of IBP, subject to the negotiation of a confidentiality agreement. IBP also said it would avail itself of Smithfield's invitation to have IBP's advisors meet with Smithfield to discuss Smithfield's plan to resolve any issues that might be raised by regulators.Joseph W. Luter, III, Chairman and Chief Executive Officer of Smithfield Foods, said, "We are pleased that IBP's Special Committee has responded so favorably to our proposal. We believe the benefits of the transaction we are proposing are indeed compelling for all shareholders, employees, raw material producers, customers and the communities of both companies, and look forward to discussing its superior merits in detail with the Special Committee and its advisors."