Tyson Foods, Inc. (NYSE: TSN) announced yesterday that it was discontinuing the Agreement and Plan of Merger between itself and IBP, inc. (NYSE: IBP). The letter from Tyson General Counsel Les R. Baledge to Robert L. Peterson, Chairman and Chief Executive Officer of IBP and JoAnn R. Smith, Chairperson of the IBP Special Committee, is attached.
John Tyson, Chairman and CEO, said, “While we continue to believe that the combination of IBP and Tyson would have created the premiere protein company in the world, we simply cannot endorse a decision to complete the transaction under the facts as we understand them today. My decision today was based on what I felt was in the best interest of our Company and its Shareholders.”
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About Tyson Foods, Inc.
Tyson Foods, Inc., headquartered in Springdale, Ark., is the world’s largest fully integrated producer, processor and marketer of chicken and chicken-based convenience foods, with 68,000 team members and 7,400 contract growers in 100 communities. Tyson has operations in 18 states and 15 countries and exports to 73 countries worldwide. Tyson is the recognized market leader in almost every retail and foodservice market it serves. Through its Cobb-Vantress subsidiary, Tyson is also a leading chicken breeding stock supplier. In addition, Tyson is the nation’s second largest maker of corn and flour tortillas under the Mexican Original® brand, as well as a leading provider of live swine.
March 29, 2001
BY FACSIMILE (605-235-2427)
Mr. Robert L. Peterson
Chairman and Chief Executive Officer
Ms. JoAnn R. Smith
Chairperson of the Special Committee
IBP, inc.
800 Stevens Port Drive
Dakota Dunes, South Dakota 57049
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By GlobalDataDear Mr. Peterson and Ms. Smith:
Tyson Foods, Inc. and Lasso Acquisition Corporation (together, “Tyson”) will issue a press release today announcing discontinuation of the transactions contemplated by the Agreement and Plan of Merger dated as of January 1, 2001 among IBP, inc. (“IBP”) and Tyson (the “Merger Agreement”). We intend to include this letter with our press release.
On December 29, 2000, the Friday before final competitive negotiations resulting in the Merger Agreement, your counsel received comments from the Securities and Exchange Commission (“SEC”) raising important issues concerning IBP’s financial statements and reports filed with the SEC. As you know, we learned of the undisclosed SEC comments on January 10, 2001. Ultimately, IBP restated its’ financials and filings to address the SEC’s issues and correct earlier misstatements. Unfortunately, we relied on that misleading information in determining to enter into the Merger Agreement. In addition, the delays and restatements resulting from these matters have created numerous breaches by IBP of representations, warranties, covenants and agreements contained in the Merger Agreement which cannot be cured.
Consequently, whether intended or not, we believe Tyson Foods, Inc. was inappropriately induced to enter into the Merger Agreement. Further, we believe IBP cannot perform under the Merger Agreement. Under these facts, Tyson has a right to rescind or terminate the Merger Agreement and to receive compensation from IBP. We have commenced legal action in Arkansas seeking such relief. We hope to resolve these matters outside litigation in an expeditious and business-like manner. However, our duties dictate that we preserve Tyson’s rights and protect the interests of our shareholders.
If our belief is proven wrong and the Merger Agreement is not rescinded, this letter will serve as Tyson’s notice, pursuant to sections 11.01 (f) and 12.01 of the Merger Agreement, of termination.
Very truly yours,
Les R. Baledge
Executive Vice President and
General Counsel
cc: Sheila B. Hagen, Esq. (by fax – 605-235-2427)
Richard D. Katcher, Esq. (by fax – 212-403-2222)
Lawrence Lederman, Esq.(by fax – 212 822-5732)
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