Chicagoo-based Hillshire Brands Co., the target of a $7.7 billion takeover bid from Tyson Foods Inc., withdrew its recommendation to acquire Pinnacle Foods Inc.
Tyson's $63-a-share offer constitutes a superior proposal and Hillshire recommends that its shareholders vote against it buying Pinnacle, Hillshire said today in a statement. Hillshire said it does not yet have the right to terminate its merger agreement with Pinnacle.
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Tyson had demanded the termination of the Pinnacle deal as a condition of the Hillshire takeover. If Pinnacle agrees to the scrapping of the deal prior to a shareholder vote, it may get a $163 million termination fee, Hillshire said today.
Tyson trumped Pilgrim's Pride Corp., the U.S. chicken producer controlled by Brazil's JBS SA, following a final round of bidding for Hillshire that concluded June 8. Pilgrim's withdrew after declining to increase its bid for a second time. Its last offer was $55 a share.