Brazilian meat conglomerate JBS SA said it has proposed to buy the portion of chicken processor Pilgrim’s Pride Corp. it doesn’t already own, during a boom time for the often-cyclical chicken industry.
The offer for the roughly 20% stake is valued at about $1.3 billion, based on Pilgrim’s Pride’s 243.7 million shares outstanding, according to FactSet. At $26.50 a share in cash, the offer represents a nearly 17% premium to Thursday’s closing price of $22.68 for Greeley, Colo.-based Pilgrim’s Pride. The offer comes as surging demand for chicken breasts, wings and other products has propelled poultry prices while restaurants reopen.
JBS, which already owns about 80.2% of Pilgrim’s Pride, on Friday said its proposal is subject to the approval of a special committee of Pilgrim’s Pride board members.
The São Paulo company said it is only looking to buy the rest of Pilgrim’s Pride and it has no interest in selling its stake in the chicken processor. JBS agreed to buy a majority stake in Pilgrim’s Pride in 2009.
Shares of Pilgrim’s Pride rose about 21% to $27.50 Friday morning.
