Originally created 08/22/06

Another buyout offer is on table

ATLANTA - The country's No. 3 chicken producer, Gold Kist, said Monday it wants to remain a standalone company despite buyout offers - including one that was made public last week - from Pilgrim's Pride Corp.

Atlanta-based Gold Kist, however, said its board of directors would consider the latest offer.

Gold Kist said in a statement that Pilgrim's Pride, the No. 2 chicken producer in the U.S., has made several unsolicited offers this year to buy the company. Gold Kist rejected the offers each time, with the most recent rejection in July.

On Friday, Pilgrim's Pride made public its latest offer of $20 a share in cash, equaling about $1 billion or 55 percent over Gold Kist's closing stock price Friday of $12.93. Shares soared $6.09, or 47 percent, to close at $19.02 on Nasdaq.

The Pittsburg, Texas-base Pilgrim's Pride also would absorb $144 million in debt from Gold Kist.

"We were ... surprised and disappointed that Pilgrim's chose to make public its unsolicited proposal at this time," Gold Kist said.

Gold Kist also said it plans to go ahead with strategies to expand its business after weathering a recent downturn in poultry prices.

Gold Kist had sales of $2.30 billion in its most recent fiscal year. The company produces, processes and sells poultry under brands including Medallion and Gold Kist Farms.

Pilgrim's Pride had sales of $5.67 billion in the fiscal year that ended last September.

The company has boosted its size through acquisition but still trails No. 1 chicken producer Tyson Foods Inc., which has annual sales of $26 billion.

Poultry producers have been struggling with an oversupply of chicken parts, which have depressed prices. Concerns about bird flu, especially in overseas markets, also have cut into demand.

Pilgrim's Pride said it made the offer Friday because that was the deadline for nominating a slate of directors for Gold Kist's next shareholder meeting, which has not yet been scheduled.


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