Gold Kist has rejected “as inadequete” a hostile takeover bid by US poultry producing rival Pilgrim’s Pride.
Pilgrim’s offer of US$20 per share for Gold Kist was deemed too low by Gold Kist yesterday (12 October).
“Our Board unanimously determined that the offer is inadequate and does not fully reflect the value of Gold Kist, including the Company’s strong market position and future growth prospects,” said John Bekkers, Gold Kist president and CEO. “We have successfully positioned ourselves to take advantage of attractive growth opportunities in key markets and are confident in our prospects.”
In addition, Gold Kist announced that it has filed a lawsuit in federal court in the Northern District of Georgia to stop Pilgrim’s from proceeding with what it calls an unlawful solicitation of Gold Kist stockholders to add its own officers to the board of directors of Gold Kist.
In response, Pilgrim’s Pride Corporation said: “We once again are disappointed in the Gold Kist board’s recommendation which has failed to recognize both the value our offer affords Gold Kist’s stockholders and the opportunity presented to employees and contract growers.
“For Gold Kist stockholders in particular, the transaction’s benefits are reflected in the price we have offered, which represents a premium of 55% over Gold Kist’s closing stock price on 18 August 2006, the last day of trading before Pilgrim’s Pride notified Gold Kist’s board of directors in a public letter that it was offering $20 per share in cash for the company. Furthermore, we intend to vigorously defend the lawsuit filed in Federal Court in the Northern District of Georgia.”
Gold Kist added that Pilgrim’s offer was made at a time when Gold Kist’s stock price was temporarily depressed following a recent cyclical downturn in the industry.
Pilgrim’s Pride’s tender offer is scheduled to expire at midnight, New York City Time, on Friday 27 October 2006, unless extended.