Pilgrim's Pride Forms Special Committee to Evaluate JBS Buyout Bid
Pilgrim's Pride Corporation (NASDAQ:PPC) has set up a special committee of independent directors to assess an unsolicited buyout proposal from JBS N.V. Class A (NYSE:JBS). In August, JBS, which currently holds about 82% of Pilgrim's Pride, offered to purchase all remaining publicly traded shares through an all-stock transaction. Under those terms, Pilgrim's Pride investors would receive 2.086 JBS Class A shares for each share of Pilgrim's Pride they hold.
This independent review is a key step in safeguarding public investors during a majority-owner buyout. The company will not approve the JBS transaction without a positive recommendation from this committee. Furthermore, the deal must be approved by a majority of votes from shareholders who are independent of JBS and its affiliates.
To aid in its evaluation, the committee has selected Moelis & Company LLC as financial advisor and Ropes & Gray LLP as legal counsel. Market participants will now monitor whether the committee recommends the transaction or if JBS will sweeten its offer to gain the necessary support from minority shareholders. Following the news, Pilgrim's Pride shares rose 0.46% to $28.63, and JBS shares gained 1.33% to $12.92.
Key points
- Pilgrim's Pride Corporation formed an independent committee to evaluate an unsolicited buyout offer from majority shareholder JBS N.V. Class A.
- JBS owns 82% of Pilgrim's Pride and has proposed acquiring the remaining shares in an all-stock transaction.
- The proposed deal would exchange each Pilgrim's Pride share for 2.086 JBS Class A shares.
- Pilgrim's Pride will not approve the transaction without the committee's recommendation and approval from a majority of minority shareholders.
- The special committee has hired Moelis & Company LLC as financial advisor and Ropes & Gray LLP as legal counsel.
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How we writeDisclaimerQuestions and answers
What is the JBS proposal for Pilgrim's Pride?
JBS has proposed to buy all remaining public shares of Pilgrim's Pride in an all-stock deal, offering 2.086 JBS Class A shares for each Pilgrim's Pride share.
Who is evaluating the JBS proposal for Pilgrim's Pride?
A newly formed special committee of independent and disinterested Pilgrim's Pride directors is reviewing the proposal, assisted by financial and legal advisors.
What is required for the Pilgrim's Pride buyout to be approved?
The deal requires a positive recommendation from the special committee and the approval of a majority of minority shareholders not affiliated with JBS.