November 9, 2006

 

Gold Kist lists reasons why stockholders should not sell out

 

 

Gold Kist's chairman and CEO have written a letter to stockholders addressing the unsolicited offer from Pilgrim's Pride and defended the company's strategy of holding Pilgrim's offer at bay. 

 

Gold Kist, the third largest poultry company in the US, is fighting off a takeover offer from the country's second largest company, Pilgrim's Pride. If the takeover is successful, the combined entity would form a company larger than current market leader Tyson.

 

Gold Kist Inc. has made public a letter its Chairman of the Board, A.D. Frazier, Jr., and President and Chief Executive Officer, John Bekkers. The letter defends the company's handling of the unsolicited offer from Pittsburg, Tex.-based Pilgrim's Pride Corp which had failed buyover attempts on two previous occasions. 

 

In the letter, Frazier and Bekkers reiterated that the Pilgrim's Pride offer is inadequate and urged stockholders to reject the offer. They also reminded stockholders who have already tendered their shares that they have the right to withdraw until the offer expires.

 

Pilgrim's Pride has offered to purchase all of the outstanding shares of Gold Kist common stock for $20.00 per share in cash in a US$1 billion takeover.

 

The company extended the offer and withdrawal rights last week until November 29 and reserved the right to further extend the offer.

 

Frazier and Bekkers believed the best course of action is to continue its strategic business plan to build value in the company.

 

Successful execution of its long-term strategic plan would bring greater value than the current offer from Pilgrim's Pride, the letter said.

 

Gold Kist's recent initiatives to expand its private label and value-added businesses and to improve operating efficiencies proves its determination to grow the business, the letter said. Gold Kist's strong growth prospects are, in part, why Pilgrim's Pride is so eager to purchase Gold Kist, the letter stressed. 

 

Gold Kist earlier this month held a grand opening for its US$70 million, 180,000-square-foot expansion in Live Oak, Fla. In September, it completed a US$30 million expansion of a poultry plant in Guntersville, Alabama.