June 6, 2011

 

Smithfield Foods withdraws bid to attain stake in Campofrio

 

 

Smithfield Foods Inc. on Friday (Jun 3) said it has withdrawn its bid to purchase a majority stake in Campofrio Food Group S.A., a European packaged meats organisation.

 

The Smithfield-based hog producer and pork processor said its decision to end discussions was influenced by continued adverse economic conditions in Europe that show few signs of abating as well as the recent decline in Smithfield's stock price that would have made the transaction more difficult to finance.

 

Smithfield's stock has declined by more than US$4 a share, about 13% in the last three months. Shares closed on Thursday (Jun 2) at US$19.85.

 

Smithfield said in April it was in discussion with Campofrio Chairman Pedro Ballve and evaluating a joint-delisting takeover bid to acquire an additional 50% stake in the meat company for about US$13.62 per share.

 

Smithfield owns about 37% of Campofrio; the acquisition would have given the company a 87.6% controlling interest.

 

Smithfield President and CEO C. Larry Pope said the company remains committed to holding its stake in Campofrio. "We will continue to look for ways to capture and enhance synergies between Campofrio and Smithfield for the companies' mutual benefit, despite the inability to merge the companies at the present time," he said, in a statement.

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