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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

JBS S.A. Flip-flops on Acquiring All of the Equity in Pilgrim’s Pride Corp.

02/13/2022

A Special Committee of the Board of Directors of Pilgrim’s Pride Corporation previously turned down a November 15th upgraded offer of $28.50 per share for the 17.5 percent of the equity not owned by the holding company. On February 4th, 2022, JBS S.A. indicated that it wiould revert with an offer by the end of February. In the event JBS S.A. filed a document with the SEC indicating that they have abandoned their attempt to purchase the remaining equity in PPC. Prior to the announcement PPC closed at $27.88 on Thursday 17th falling to $24.08 by 15H00 on Friday 18th February. The action by JBS S.A. is inexplicable. Perhaps they were concerned over FTC scruitiny running against consolidation or they may be waiting for a more favorable price before exercising their 80 percent shareholding to effect a purchase. JBS S.A. has aspirations  for a NYSE  listing of all its U.S. protein businesses. 

 

Shares in Pilgrim’s Pride Corporation (PPC) have ranged over the past 52 weeks from $20.32 to $24.08 with a 50-day moving average of $27.98.  The company carries $3.5 billion in debt against a market capitalization of $6.85 billion. On a trailing 12 month basis, PPC has provided a 5.2 percent return on assets but -0.2 percent on equity.

 

At 14h00 on February 8th, PPC traded at $28.84 after receiving a 3.7 percent boost from the Q1 results posted by Tyson Foods.  Concurrently, JBS S.A. and Marfrig Global rose five percent on their respective exchanges in Brazil based on the results and guidance posted by Tyson Foods.


 
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