Tyson Foods Proposes To Acquire Hillshire For $50.00/share - Quick Facts

(RTTNews) - Tyson Foods Inc. (TSN) announced it proposes to acquire The Hillshire Brands Company (HSH) for $50.00 per share in cash. At a total value of $6.8 billion, the proposal represents a multiple of 13.4x Hillshire's trailing LTM adjusted EBITDA, Tyson said. The proposal is subject to the termination of Hillshire's merger agreement with Pinnacle.

Tyson Foods said the proposal would provide Hillshire shareholders with an immediate and significant return on their investment in Hillshire and constitutes a significantly superior alternative to Hillshire's previously announced agreement to acquire Pinnacle Foods. Tyson said the proposed price represents a 35% premium to the unaffected closing price per share of the company's common stock on May 9, 2014, the day prior to the announcement of Hillshire's proposed agreement to acquire Pinnacle Foods.

In a letter sent to Sean Connolly, Hillshire's CEO, Tyson Foods stated that: "With respect to your agreement to acquire Pinnacle, we believe that our proposed transaction constitutes or is reasonably expected to lead to a Superior Proposal. Accordingly, we believe that your board can and should, consistent with its fiduciary duties and its obligations under Section 5.4 of the Pinnacle merger agreement, make a determination to that effect and authorize the company to provide us with a draft of an Acceptable Confidentiality Agreement as soon as possible."

Tyson Foods expects that the proposed transaction would be accretive to earnings per share in the first full year after completion.