Tyson Foods Inc offer to acquire IBP for US$ 4.2 billion

10 January 2001

There has been yet another bid for IBP stock. This time Tyson Foods Inc, headquartered in Springdale, Arkansas, the world's largest fully integrated producer, processor and marketer of chicken and chicken-based convenience foods, have made an offer to acquire all outstanding common stock of IBP inc through a part-cash, part-stock transaction. Under the proposal, IBP shareholders will receive $26 for each share of IBP common stock, with 50% of the consideration in cash and 50% in Tyson Class A common stock. The proposed transaction would have a total transaction value of approximately $4.2 billion, including the assumption of $1.4 billion of IBP debt. The proposal is not subject to the receipt of financing, as Tyson believe that they can finance the cash portion of the purchase price from readily available sources. John Tyson, Tyson's chairman, president and ceo: said 'This is a rare point-in-time opportunity to acquire a company that will make us the world's leading marketer of beef and pork, in addition to chicken.' Tyson's proposal follows two publicly announced proposals to purchase all of IBP's outstanding common stock. On October 1, IBP entered into a definitive merger agreement for a leveraged buyout at $22.25 in cash per share by a group comprised of affiliates of Donaldson Lufkin & Jenrette, certain members of IBP senior management, Archer Daniels Midland Company and Booth Creek Partners. On November 12, 2000, Smithfield Foods made an unsolicited proposal to the special committee of the board of directors of IBP for a stock-for-stock merger in which shareholders of IBP would receive a fixed price of $25.00 per share in Smithfield common stock. Tyson's proposal represents a 42% premium over the closing price of IBP on September 29, 2000, the last trading day prior to the public announcement of the management buyout, and is higher than all other offers for the company. John Tyson added: 'We feel our proposed transaction represents superior value for IBP shareholders, as Tyson is an experienced transaction partner with a strong balance sheet. We envision that the IBP organisation will continue to operate its business much as it has in the past, and we are not faced with the problem of having to shut down overlapping production facilities.'

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