US: Gold Kist resists Pilgrim’s Pride advance

The board of directors of the third-largest poultry producer in the US, Gold Kist, has reaffirmed its faith in the company’s strategic direction and said that it hopes to remain a standalone company in the face of a proposal from Pilgrim’s Pride to acquire all outstanding common shares.

August 29, 2006

“The Gold Kist Board strongly believes in the company’s ability to successfully execute our long-term strategic plan to provide significant value to our stockholders. With our strong financial position and efficient operations, we believe that we performed competitively with our peers in the recent downturn. We are confident in our previously stated strategy to expand our private label and value-added businesses, to improve our operating efficiencies and to be an industry consolidator.” the board said in an statement.

Gold Kist said that Pilgrim’s Pride, the second-largest chicken producer in the US, has made several unsolicited offers this year to buy the company. Gold Kist rejected the offers each time, with the most recent rejection in July.

The latest bid, which Pilgrim’s Pride made public last week, offered US$20 a share – 55% over the value of Gold Kist’s stock at the time of the offer. Following the offer, shares soared from $12.93 to close at $20.19 yesterday (28 August).

The board said that it would consider the proposal and advise shareholders on its findings: “The board plans to carefully examine this proposal and has designated a committee to consider our strategic plans and potential alternatives to maximise stockholder value.”

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