June 24, 2014

Bidding battle for Hillshire sends High Liner Food's share price to highest

 

Frozen seafood processor, High Liner Foods, has seen its share price reach an 'all-time high due to interest in the sector and the bidding war for Hillshire Brands.

According to sources, the bidding war between Tyson Foods and Pilgrim's Pride for Hillshire Brands, which had formerly proposed takeover of Pinnacle Foods, has driven High Liner's share price.

On June 18, the board of Hillshire Brands said it no longer recommends the company's US$6.6 billion takeover of Pinnacle, the parent company of frozen seafood brands, Mrs Paul's and Van der Kamp's.

Hillshire's board withdrew its support for the deal in light of an improved offer from Tyson Foods, which is now offering to pay US$63 per share in cash for Hillshire – thereby beating an offer by JBS-backed Pilgrim's Pride by US$8.

This has driven High Liner's share price and stimulated talk of the processor being a target. However, an obstacle against such action is the large ownership of chairman, David Hennigar, who controls 37% of stock.

High Liner has developed into one of the largest frozen seafood processors in North America through a series of acquisitions in foodservice-focused firms on the US East Coast. The company, based in Lunenburg, Canada, generates around three quarters of its turnover from the US.

Last week, High Liner closed at US$23.50, a one-year return of 64.50%.