Jimmy Dean owner Hillshire had bid for Pinnacle Foods

Jimmy Dean owner Hillshire had bid for Pinnacle Foods

US chicken group Pilgrim's Pride is looking to beef up its portfolio through an offer to acquire Hillshire Brands for US$6.4bn.

The cash offer of $45 per share represents a premium of around 22% to Hillshire's closing price on the last full day of trading (27 May). However, Hillshire's share price shot up 22.6% in early trade today, climbing to $45.39 a share and suggesting that investors expect the offer to be increased.

Pilgrim's takeover bid follows news last week that Hillshire had itself issued an offer to acquire Pinnacle Foods for $4.3bn.

"A sale of (Hillshire) at the price ... offers superior value and far greater certainty to Hillshire shareholders than the contemplated Pinnacle transaction," Pilgrim's Pride CEO William Lovette wrote in a letter to Hillshire.

Pilgrim's Pride also revealed that the offer is supported by Brazilian meat processor JBS, which owns about 68% of the US company.

Pilgrim's said it expects to finance the deal with existing cash and third party financing.