Tyson Nearing Completion of Deal With Holly Farms, Company Says
SPRINGDALE, Ark. (AP) _ A Tyson Foods official said today the company is preparing to raise its bid for Holly Farms Corp. to $63 a share and that the deal is very close to completion.
Holly Farms directors met in New York on Wednesday to consider takeover bids from the Springdale-based Tyson and from ConAgra of Omaha, Neb. Tyson previously offered $60 a share.
″They haven’t really put the stamp of approval on it yet,″ said Bob Justice, Tyson vice president for community relations. ″There are little complications we think are sure to be ironed out.″
Meanwhile, a spokesman for Holly Farms in Memphis, Tenn., said, ″As of 8:15 no decision has been made. And without a decision there is no announcement.″
″I don’t think anyone has more at stake than Tyson,″ said Leeam Lowin, a Greenwich, Conn., investor and former Holly Farms shareholder. ″Chicken is their whole world. ConAgra is into other things. If there is no deal, Tyson would have the most likelihood of having troubled times in the future.″
Officials on all sides of the long-running battle for control of Holly Farms and leadership of the U.S. chicken industry declined comment Wednesday.
ConAgra executives declined to say whether they raised their bid for Holly Farms.
If Holly Farms’ board recommends a sale to ConAgra and if shareholders go along with that recommendation, Holly Farms executives have said the company is expected to operate independently of the food conglomerate.
If the board recommends that shareholders sell their stock to Tyson Foods, and the shareholders follow that advice, Holly Farms will become part of the poultry empire founded by a man who ran out of gas in Springdale and started what became the country’s largest chicken processor.
ConAgra is seeking court permission to proceed with a contract reached in November to acquire Holly Farms.
″We intend to stick by our guns,″ ConAgra spokesman Walt Casey said Wednesday.
Tyson Foods, the nation’s largest poultry processor, has been trying since October to take over Holly Farms, a diversified company heavily involved in fresh poultry sales.
Resisting those advances, Holly Farms managers worked out a merger agreement with ConAgra, but a Delaware court blocked it on a request from Tyson.
Casey said ConAgra asked the court Tuesday for permission to continue with the Holly Farms deal, though it will likely lead to lengthy litigation.
Jim Blair, a Tyson lawyer, said Holly Farms managers have tried to favor ConAgra in setting rules for receiving bids, but Holly Farms spokesman Ted Bailey denied the allegation.
Tyson’s $60 per share offer was valued at more than $1 billion. ConAgra has proposed a stock swap also worth about $1 billion.
Blair said Holly managers have asked their board to amend a stock bonus plan for about 600 management employees.
The change would require a company buying Holly Farms for cash to pay those employees a total of $60 million, Blair said.
In its court challenge that stopped the Holly-ConAgra merger, Tyson said Holly Farms managers were ignoring the best interest of their shareholders by not considering all buyout offers equally.