Hillshire Brands Board Authorizes Discussions with Pilgrim’s Pride and Tyson Foods

04 Jun 2014 --- The Hillshire Brands Company (NYSE: HSH) today announced that its Board of Directors, after consultation with its independent legal and financial advisors, has made the requisite determination under Hillshire Brands’ merger agreement with Pinnacle Foods Inc. to provide information to, and conduct separate discussions with Pilgrim’s Pride Corporation and Tyson Foods, Inc. with regard to their recent unsolicited proposals.

As announced on Tuesday May 27, Pilgrim’s Pride proposed to acquire all of Hillshire Brands’ outstanding common stock for $45.00 per share in cash. On June 1, Pilgrim's Pride increased its offer to $55.00 per share in cash. On May 29, Tyson Foods announced its proposal to acquire Hillshire Brands for $50.00 per share in cash. Hillshire Brands is party to a merger agreement with Pinnacle Foods pursuant to which Hillshire Brands agreed to acquire Pinnacle Foods for per share consideration of $18.00 in cash and 0.5 shares of Hillshire Brands common stock. Both the Pilgrim’s Pride and Tyson Foods proposals are conditioned on the termination of the Pinnacle Foods merger agreement. Hillshire Brands does not have the right to terminate the Pinnacle Foods merger agreement on the basis of either of these proposals or enter into an alternative acquisition agreement with either of these parties prior to termination. There can be no assurance that any transaction will result from these proposals.

The Hillshire Brands Board of Directors is not withdrawing, modifying, withholding or qualifying its recommendation with respect to the Pinnacle merger agreement and the merger, or proposing to do so, and is not making any recommendation with respect to either the Pilgrim’s Pride or Tyson Foods proposals.

Centerview Partners and Goldman, Sachs & Co. are acting as financial advisors to Hillshire Brands, and Skadden, Arps, Slate, Meagher & Flom LLP is acting as its legal advisor.

Yesterday Pilgrim's Pride Corporation confirmed that on June 1, 2014, it submitted a revised proposal to acquire The Hillshire Brands Company (NYSE: HSH) ("Hillshire") for $55.00 per share in cash in a transaction valued at $7.7 billion. The proposal represents an increase of $1.3 billion versus Pilgrim's initial proposal, and a 49% premium over Hillshire's share price one day prior to the announcement of its transaction with Pinnacle Foods Inc. Pilgrim's revised proposal is not subject to any financing conditions or contingencies.

Pilgrim's is confident the transaction is strategically and financially compelling, and creates considerable value for the shareholders of both Pilgrim's and Hillshire. Pilgrim's anticipates run-rate cost synergies in excess of $300 million annually to come from operational and value-chain efficiencies and, in addition, significant growth opportunities in higher margin branded products, both in North America and internationally. Pilgrim's expects the increased cash flow from the combined company and the realization of synergies will allow it to rapidly pay down the initial acquisition debt. Pilgrim's projects the combination to be immediately accretive to earnings due to these significant synergies and the availability of attractive financing terms.

Lazard is acting as financial advisor to Pilgrim's and Cravath, Swaine & Moore LLP is acting as its legal counsel.