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November 8, 2006

US: Gold Kist board re-affirms opposition to Pilgrim offer

The board of US poultry group Gold Kist has restated its opposition to the takeover bid by Pilgrim’s Pride, writing to its stockholders urging them again to reject the US$20-per-share cash offer for the company.

The board of US poultry group Gold Kist has restated its opposition to the takeover bid by Pilgrim’s Pride, writing to its stockholders urging them again to reject the US$20-per-share cash offer for the company.

In the letter, Gold Kist says the board has unanimously agreed that the offer price is inadequate, urging shareholders to reject the offer and adding that even if stockholders have already tendered their shares, they can always withdraw any shares tendered until the offer expires.

“Your board is committed to fulfilling its duties to you as stockholders and is always committed to maximising stockholder value,” the letter reads. “We firmly believe that the best course of action at this time is to continue to execute our strategic business plan to build value in the company. We are also concurrently examining other strategic alternatives that may create greater value.”

The letter adds that the board believes Gold Kist’s successful execution of its long-term strategic plan will bring greater value than the current offer from Pilgrim’s Pride, citing recent initiatives to expand its private label and value-added businesses and to improve operating efficiencies. “Our growth prospects are, in part, why Pilgrim’s Pride is so eager to purchase Gold Kist at their offer price at this point in time,” the letter says.

Pilgrim’s Pride, the second largest chicken producer in the US, launched its US$1bn hostile takeover bid for Gold Kist in September. The original bid was due to expire on 27 October, but has now been extended until 29 November.

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