US poultry major Sanderson Farms said to be 'exploring sale'
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US poultry major Sanderson Farms ‘exploring sale’

By Andy Coyne 22 Jun 2021 (Last Updated June 22nd, 2021 16:53)

US media outlets suggest a sale of the business is being considered eight months after a previous offer was turned down.

US poultry major Sanderson Farms ‘exploring sale’

Sanderson Farms, the US poultry processing heavyweight, is said to be weighing up the sale of the business.

The Wall Street Journal (WSJ) newspaper, quoting a source familiar with the matter, reported the Mississippi-based company has drawn interest from buyers including agricultural investment firm Continental Grain Co, which owns a smaller chicken processor, Wayne Farms.

In October last year, Sanderson Farms rejected an “unsolicited” takeover proposal from New York-based investment firm Durational Capital Management.

Nasdaq-listed Sanderson said at the time its board had “unanimously” dismissed the approach by Durational Capital, an investor focused on consumer goods which is a shareholder in the business.

With regard to its current situation, the WSJ – in a report carried by other major media outlets in the US – said that any deal with Continental Grain would form a company producing about 15% of the country’s chicken meat.

In May, Sanderson, which operates 13 poultry plants and processing facilities and employs more than 18,000 people, reported net sales of US$1.34bn in Q2 of its fiscal 2021. This compared to $844.3m in the same period a year earlier. Net income was $96.9m compared to $6.1m for the Covid-hit period 12 months earlier.

Just Food asked Sanderson Farms and Continental Grain Co. to comment on the media reports outside of US office hours.

A Sanderson spokesperson said it is company policy not to comment on market rumours or speculation.