(Updates with analyst’s comment in fourth paragraph.)
June 19 (Bloomberg) -- Smithfield Foods Inc., the world’s largest hog producer, bid for a large packaged-meat business after it got an initial takeover offer from Shuanghui International Ltd. and before it agreed to be acquired by the Chinese company.
Smithfield’s offer was made March 25 and was rejected by the target on April 10, the U.S. company said yesterday in its proxy statement. Smithfield, which retained Barclays Plc to help evaluate the "potentially significant" deal, didn’t identify the business.
The U.S. pork producer had considered a purchase in the packaged-meat industry since January, and the proposed deal was discussed at an April 21 board meeting, the statement shows. Possible targets in the U.S. include Chicago-based Hillshire Brands Co. and closely held Land O’Frost Inc., said Ken Goldman, an analyst at JPMorgan Chase & Co. in New York.
"There are few packaged meat companies of size in the U.S.," Goldman said today in a note. "The fact that any large packaged meats business was being pursued should be read as a positive for a pure play such as Hillshire, as it suggests an attractive M&A environment."
Mike Cummins, a Hillshire spokesman, said the company doesn’t comment on rumor or speculation. Voicemails seeking comment from Land O’Frost executives weren’t immediately returned.
The proxy statement also shows Smithfield received competing offers from two other foreign companies following the initial $30-a-share bid from Hong Kong-based Shuanghui and considered other options including breaking up the company and a sale to a private-equity firm. It agreed on May 29 to Shuanghui’s revised bid of $34-a-share.
Smithfield weighed the possibilities as the outlook for its fourth-quarter earnings weakened and after investor Continental Grain Co. said in a March letter the hog producer should be split up.