September 15, 2003
Smithfield Will Review Cargill's Offer For Farmland Foods
Smithfield Foods Inc. will "consider all of its alternatives" in relation to Cargill Inc's bid to buy Farmland Foods for $385 million, a higher offer than the $363.5 million that Smithfield planned to pay for the bankrupt company.
Earlier Friday, Cargill said it submitted the $385 million for the pork processing unit of Farmland Industries Inc., which has been in bankruptcy protection since May 2002.
Smithfield signed its $363.5 million "stalking horse" bid for Farmland Foods on July 15. A stalking horse bid involves sale deals made before a bankruptcy auction, setting the minimum bid price that can be asked for a bankrupt company's assets.
In a press release Friday, Smithfield Foods said it will review the Cargill bid and take whatever action it believes is in the best interest of its shareholders and Farmland's constituencies.
Smithfield, the country's largest pork processor, expects an auction date for Farmland Foods to be set next month.
Smithfield's deal did raise some concerns in Washington, as Iowa senator Charles Grassley said in July that the deal would cause too much concentration in the pork industry and urged Department of Justice scrutiny.