Brazilian company offers 2.086 JBS Class A shares for each Pilgrim’s share
Brazilian meat giant JBS said Tuesday (18) that it had submitted a nonbinding offer to the board of directors of Pilgrim’s Pride (PPC), its U.S. subsidiary, to acquire shares held by minority shareholders. The deal would result in the delisting of the chicken producer whose shares trade on the Nasdaq.
Under the proposal, each Pilgrim’s Pride minority shareholder would exchange one common share for 2.086 JBS Class A shares. The exchange ratio is based on the closing prices on Tuesday (18), when JBS shares closed at $13.66 and Pilgrim’s shares at $28.49. JBS owns nearly 82% of Pilgrim’s shares.
Jeremiah O’Callaghan, chairman of JBS’s board of directors, said in a statement that “for more than 16 years, JBS and PPC have worked together as PPC expanded its operations, strengthened its global presence and significantly grew its revenue.”
“We believe this proposal offers PPC shareholders the opportunity to continue participating in PPC’s future performance through ownership of JBS shares, with exposure to a larger and more globally diversified business,” he said. O’Callaghan added that JBS’s long-standing relationship with and familiarity with Pilgrim’s Pride’s employees and operations “should support continuity for employees, customers and business partners throughout the process.”
The company also said the move would simplify its organizational structure and reduce costs associated with PPC’s public listing.
The proposal must be reviewed by a special independent committee of the U.S. company, which is expected to be advised by financial and legal advisers.
Once approved by Pilgrim’s decision-making bodies, the proposal must also receive the approval of a majority of the U.S. company’s shareholders other than JBS. In addition, the transaction will be subject to certain closing conditions. According to the statement, advancing the proposal does not require approval from JBS shareholders.
Once the process is completed, Pilgrim’s shares could cease trading on the Nasdaq.
Citi is serving as JBS’s financial adviser, while law firm White & Case LLP is acting as its legal adviser. Collected Strategies is serving as communications adviser, according to the Brazilian company’s filing.
By Camila Souza Ramos, Globo Rural — São Paulo
Source: Valor International
https://valorinternational.globo.com/