October 16, 2006

Gold Kist snubs Pilgrim's takeover offer, again

US chicken producer Gold Kist Inc on Thursday (Oct 12), said it is rejecting the US$1 billion takeover offer Pilgrim's Pride Inc, saying the bid was too low.

Members of the board decided the offer is inadequate and did not reflect Gold Kist's value, including the company's strong market position and future growth prospects, Gold Kist  Chief Executive John Bekkers said in a statement.

Last month, Pilgrim's Pride, the second largest US chicken producer, launched a US$1 billion offer for the industry's third largest chicken producer. If the deal had gone through, the combined entity would have toppled industry leader Tyson Foods from its place as the leader in the US chicken industry. 

Pilgrim launched a US$20-a-share hostile bid for Gold Kist after failing to reach a deal with the company. The offer is set to expire by the end of the month.

Gold Kist has urged its shareholders to hold onto their shares while filing suit in federal court to prevent Pilgrim's officers from being added to Gold Kist's board.