Smithfield Foods’ shareholder Continental Grain, which has been a vocal critic of the US pork group’s recent performance, has backed the company’s decision to sell to Chinese meat giant Shuanghui International.
The agribusiness said yesterday (3 June) it would sell its stake in Smithfield as it was “satisfied” with the return investors could get from the Shuanghui offer, which values the US group at US$7.1bn including debt.
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In recent months, Continental Grain had called on Smithfield’s management to examine ways to boost returns to investors. Last month the agribusiness, which holds around 6% of Smithfield shares, argued the company should be split into three seperate units in order to unlock value for shareholders.
Continental chairman and CEO Paul Fribourg said yesterday the firm “congratulates” Smithfield on the planned deal with Shuanghui.
“We have been advocating for value creation and are pleased that the Smithfield board of directors and management are being proactive in realising value for the benefit of all of its shareholders,” Fribourg said.
“In light of the announced transaction, we have elected to exit our long-term ownership position in Smithfield because we are satisfied with our investment return. We wish Smithfield and Shuanghui International the best in building a great global pork company for the future.”
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By GlobalDataShuanghui has offered US$34 per share for Smithfield, representing a 31% premium on the US firm’s share price the day before the proposal was unveiled.
The acquisition is pending shareholder and regulatory clearance.
Click here for our news and analysis coverage on the deal so far.
