The Pilgrim’s Pride Corporation has appealed to shareholders in an attempt to wrest control of Gold Kist through a hostile tender offer to purchase all outstanding common stock for US$20 per share.

This represents a 55% premium over Gold Kist’s closing stock price on 18 August, the last day before Pilgrim’s Pride notified Gold Kist’s board of its intention to acquire the company.

The transaction is valued at approximately $1bn, plus the assumption of $144m of Gold Kist’s debt.

The tender offer will expire at midnight on 27 October, unless it is extended, Pilgrim’s Pride said.

“As we have stated on numerous occasions, we would have preferred to work together with Gold Kist and its board of directors to negotiate a mutually beneficial agreement for our respective shareholders, employees, business partners and other stakeholders,” said O.B. Goolsby, Jr., president and chief executive officer of Pilgrim’s Pride.

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“Unfortunately, Gold Kist has not taken any meaningful steps to reach such an agreement, and we have been forced to take our offer directly to Gold Kist shareholders. We believe that by giving the Gold Kist shareholders a chance to decide for themselves, they will find our $20 per share cash offer attractive and will seize the opportunity to maximize the value of their investment at a substantial premium to Gold Kist’s share price prior to our offer.”

The company has obtained financing for the tender offer through a combination of an amendment to its existing credit facility and a commitment letter for an additional credit facility from Lehman Brothers.