JBS has submitted a non-binding proposal to acquire the approximately 18% of Pilgrim’s Pride that it does not already own, potentially bringing the poultry producer fully under JBS ownership.
JBS currently owns approximately 82% of Pilgrim’s Pride common stock. Under the proposal, minority shareholders would receive 2.086 JBS Class A common shares for each Pilgrim’s Pride share.
The exchange ratio was established using August 18 closing prices of $13.66 for JBS and $28.49 for Pilgrim’s Pride.
Rather than receiving cash, Pilgrim’s Pride minority shareholders would continue participating in the business through ownership of shares in JBS, a larger and more diversified global protein and prepared foods company.
JBS said full ownership could also simplify the companies’ organizational structure, eliminate costs associated with Pilgrim’s Pride remaining a standalone public company and enable more flexible capital allocation across the broader group.
Pilgrim’s Pride shareholders would also gain exposure to JBS Class A shares, which JBS said have a larger market capitalization and broader institutional investor base than Pilgrim’s Pride’s existing minority public float.
The transaction remains at the proposal stage.
JBS expects the Pilgrim’s Pride board to appoint a special committee composed of independent and disinterested directors to evaluate the proposal with independent legal and financial advisors.
JBS also expects a transaction would require approval from a majority of votes cast by Pilgrim’s Pride shares not owned by JBS or its affiliates.
Approval from JBS shareholders would not be required.
If completed, Pilgrim’s Pride common stock would cease trading on Nasdaq and would be deregistered.
Citi is serving as financial advisor to JBS, White & Case is serving as legal advisor, and Collected Strategies is providing strategic communications advice.
KEY QUOTE:
“For over 16 years, JBS and PPC have worked together as PPC has expanded its operations, strengthened its global presence and significantly grown revenue. We believe this proposal offers PPC stockholders the opportunity to continue participating in PPC’s future performance through ownership of JBS shares, with exposure to a larger and more diversified global business. Our long-standing relationship with PPC and familiarity with its team and operations should support continuity for employees, customers and business partners throughout the process. We look forward to engaging constructively with the special committee of PPC’s board of directors and its advisors as they evaluate the proposal.”
Jeremiah O’Callaghan, Chairman Of JBS
