DGAP-News: Pilgrim's Pride Proposes to Acquire Hillshire Brands for $45.00 Per Share in Cash

| Source: EQS Group AG
DGAP-News: Pilgrim's Pride /
Pilgrim's Pride Proposes to Acquire Hillshire Brands for $45.00 Per
Share in Cash

27.05.2014 / 13:10


  Proposal Provides Attractive Valuation for Hillshire and Immediate Cash Value
                           for Hillshire Shareholders

      Represents a Superior Proposal for Hillshire Shareholders Compared to
                Hillshire's Planned Acquisition of Pinnacle Foods

              Creates Fully Integrated Branded Protein Leader with
        Combined Sales of $12.4 Billion Across Broad Portfolio of Brands

GREELEY, Colo., May 27, 2014 (GLOBE NEWSWIRE) --Pilgrim's Pride Corporation
(Nasdaq:PPC) ('Pilgrim's') today announced that it has made a proposal
toacquire The Hillshire Brands Company ('Hillshire') (NYSE:HSH) for $45.00 per
share in cash, in a transaction valued at $6.4 billion. 

Pilgrim's all-cash proposal provides Hillshire shareholders with a
substantially superior alternative to Hillshire's pending acquisition of
Pinnacle Foods Inc. ('Pinnacle') (NYSE:PF), representing a 25% premium to the
volume weighted average price of Hillshire shares over the 10 trading days
following the announcement of the Pinnacle transaction. Further, the
transaction represents a compelling value to Hillshire shareholders at 12.5x
Hillshire's trailing adjusted EBITDA, including the $163 million termination
fee payable to Pinnacle. 

The proposal has the unanimous support of the Board of Directors of Pilgrim's,
as well as the support of JBS S.A., the majority owner of Pilgrim's. It is
anticipated that the proposed transaction would close in the third quarter of
2014 and would be subject to customary closing conditions and the termination
of Hillshire's merger agreement with Pinnacle. Pilgrim's expects to finance the
acquisition with a combination of existing cash balances and new debt

The transaction would create a leading branded, protein-focused company with
strong, consistent earnings and complementary competencies: 

  -- Strong Financial Profile: Together, the companies would have LTM combined
     revenues of $12.4 billion and EBITDA of $1.4 billion.
  -- Diversified and Complementary Product Portfolios and Customer Bases: 
     -- An attractive portfolio of Pilgrim's and Hillshire brands, including
        Pierce, Wing Dings, Jimmy Dean, Hillshire Farm, Ball Park and State Fair
        - all of which are number one or number two in their respective markets.
     -- Pilgrim's strong operational efficiency systems and processes align with
        Hillshire's innovation and marketing capabilities.
     -- Complementary channels with shared culture of partnering with customers
        - Pilgrim's expertise in food service brand and supermarket deli and
        Hillshire's experience in retail.
  -- Strong Synergy and Growth Opportunities: Pilgrim's expects cost synergies
     to come from operational and value-chain efficiencies and significant
     growth opportunities in higher margin branded products, both in North
     America and internationally.
  -- Maintaining Hillshire's Presence in Chicago: Appreciating the importance of
     Hillshire's heritage and connections with the communities in which it
     operates, Pilgrim's intends to make Chicago a major center of North
     American operations.

'Our proposal creates considerable value for the shareholders of both Pilgrim's
and Hillshire,' said Bill Lovette, Pilgrim's Chief Executive Officer. 'For
Hillshire shareholders, our proposal provides a substantial premium, greater
certainty and immediate cash value for their shares. We have long respected the
Hillshire business and we are confident that Hillshire's Board and shareholders
will find our all-cash premium proposal to be superior to the pending
acquisition of Pinnacle. For Pilgrim's, the addition of Hillshire's portfolio
of iconic brands and broad based marketing, innovation and distribution
expertise will enhance our position as a market leader. With our complementary
products, we believe that together Pilgrim's and Hillshire will better serve
our combined customer bases for the benefit of all our stakeholders. We look
forward to working constructively with Hillshire to sign a definitive merger
agreement and quickly realize the benefits of this combination.' 

Lazard is acting as financial advisor to Pilgrim's and Cravath, Swaine & Moore
LLP is acting as its legal counsel. 

Below is the text of the letter that was sent to Sean Connolly, Hillshire's
President and Chief Executive Officer, today: 

                                                                    May 27, 2014

Mr. Sean Connolly
President and Chief Executive Officer
The Hillshire Brands Company
400 South Jefferson Street
Chicago, IL 60607

Dear Sean,

On behalf of Pilgrim's Pride Corporation ('PPC'), we are writing to convey our
proposal to acquire The Hillshire Brands Company ('Hillshire' or the
'Company'). As expressed during our meeting in Chicago on February 20, 2014 we
have the utmost respect for Hillshire, its leadership and its employees, and,
as you are well aware, it has long been our desire to acquire the Company. We
also admire the role that Hillshire has played in the communities it serves,
and we would maintain this tradition, making Chicago a major center of North
American operations. 

Based on our extensive review of the Company, we are prepared to offer $45 per
share in cash for all of the outstanding shares of Hillshire common stock. Our
proposal values Hillshire at 12.5x its trailing twelve-month adjusted EBITDA as
of March 29, 2014, including the $163 million termination fee payable to
Pinnacle Foods Inc. ('Pinnacle'). We would assume such fee upon closing. 

Section 5.4 of your agreement with Pinnacle explicitly contemplates the
Hillshire Board, in the exercise of its fiduciary duties, entering into
negotiations and providing diligence if it receives a Superior Proposal, which
is defined as a Takeover Proposal that is more favorable to Hillshire's
stockholders from a financial point of view than the Pinnacle transaction. A
sale of the Company at the price indicated above offers superior value and far
greater certainty to Hillshire shareholders than the contemplated Pinnacle

We are coming forward now because the opportunity for your shareholders to
obtain the compelling value represented by our proposal will no longer exist if
the proposed acquisition of Pinnacle is consummated. Our offer is therefore
conditioned on the termination of this transaction (and our proposed purchase
price is not subject to reduction for any related termination fees). In light
of the materiality of the proposed transaction and disclosure rules, we plan to
announce our proposal publicly. 

We intend to finance this all-cash offer through PPC with existing liquidity
and new third party financing. The PPC balance sheet as of March 30, 2014
reflected net financial debt of $155 million, including $552 million in cash
and cash equivalents, which provides us with ample flexibility to effect an
acquisition. Pro forma leverage for PPC would be approximately 4x consolidated
2014E EBITDA, well below the levels you have communicated for the Pinnacle
transaction. Based on our strong relationships with all major financial
institutions in the U.S. and globally, we expect to finalize binding debt
financing commitments promptly. 

We have dedicated a full team to the evaluation of Hillshire, including both
management and advisors, and have conducted a thorough review of the business
and its operations based on publicly available information. In order to
finalize our proposal, we would need to complete customary confirmatory due
diligence based on non-public information, which we believe could be conducted
in parallel with documentation of the transaction without disruption to your
business. We have retained the services of Lazard as our financial advisor, and
Cravath, Swaine & Moore as our legal counsel, to assist us in consummating this
transaction, and PPC has obtained all relevant internal approvals for the
delivery of this proposal, including from our Board and our majority
shareholder, JBS. 

This preliminary proposal is a non-binding indication of interest, which
remains subject to the negotiation, execution and delivery of mutually
satisfactory definitive agreements, completion of confirmatory due diligence,
approval of the transaction by your Board of Directors, receipt of customary
approvals and the termination of Hillshire's merger agreement with Pinnacle.
Nothing contained in this letter or any resulting communications shall create
any legally binding agreements or obligations of any party referred to herein
until definitive documentation setting forth such legally binding terms has
been negotiated, executed and delivered by the parties. 

It is our strong preference to reach a negotiated transaction. Working
together, we anticipate being in a position to prepare and execute a definitive
agreement within two weeks. In the meantime, we remain at your disposal to
address any questions you may have. 

Yours sincerely,


William W. Lovette
President and Chief Executive Officer
Pilgrim's Pride Corporation


Wesley M. Batista
President and Chief Executive Officer
JBS S.A., Majority Shareholder in
Pilgrim's Pride Corporation

Conference Call Information

Pilgrim's and JBS officials will be discussing the proposed transaction with
analysts and investors on a conference call at 8:30 a.m. ET today. For those
who would like to join the call, access is available by dialing +1 (800)
860-2442 within the U.S. or +1 (412) 858-4600 internationally and requesting
the 'Pilgrim's Pride Conference.' Please note that to submit a question to
management during the call, you must be logged in via telephone. 

Replays of the conference call will be available on Pilgrim's website
approximately two hours after the call concludes and can be accessed through
the 'Investor' section of www.pilgrims.com. You can also call US +1 (877)
344-7529 within the U.S or +1 (412) 317-0088 internationally requesting
conference number 10177422. The webcast will be available for replay through
June 10, 2014. 

About Pilgrim's Pride

Pilgrim's Pride Corporation employs approximately 35,700 people and operates
chicken processing plants and prepared-foods facilities in 12 states, Puerto
Rico and Mexico. Pilgrim's primary distribution is through retailers and
foodservice distributors. 

Forward-Looking Statements

Statements contained in this press release that state the intentions, plans,
hopes, beliefs, anticipations, expectations or predictions of the future of
Pilgrim's Pride Corporation and its management are considered forward-looking
statements. These forward-looking statements include statements of anticipated
changes in the business environment in which Pilgrim's operates and in
Pilgrim's future operating results relating to Pilgrim's offer and the
potential benefits of a transaction with Hillshire. There is no assurance that
the potential transaction will be consummated, and it is important to note that
actual results could differ materially from those projected in such
forward-looking statements. Forward-looking statements in this press release
should be evaluated together with other factors that could cause actual results
to differ materially from those projected in such forward-looking statements,
particularly those risks described under 'Risk Factors' in Pilgrim's Annual
Report on Form 10-K and subsequent filings with the Securities and Exchange
Commission. Pilgrim's Pride Corporation undertakes no obligation to update or
revise publicly any forward-looking statements, whether as a result of new
information, future events or otherwise. 

         Rosemary Raysor
         Pilgrim's Pride Corp Investor Relations
         (970) 506-8192
         Andy Brimmer / Dan Katcher / James Golden / Alyssa Cass
         Joele Frank, Wilkinson Brimmer Katcher
         (212) 355-4449
News Source: NASDAQ OMX

End of Corporate News


27.05.2014 Dissemination of a Corporate News, transmitted by DGAP - a
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Language:    English          
Company:     Pilgrim's Pride  
             United States    
ISIN:        US72147K1088     
End of News    DGAP News-Service  
270727 27.05.2014