Starboard Value Will Totally Support Giving Smithfield To The Chinese After The Deal Expires

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The activist hedge fund is certain that multiple someones want to pay more than $4.7 billion—in cash!—for the world's largest collection of pigs, pig pens, pig parts and pig disassembly equipment, even if those someones have been awfully shy since the deal with Shuanghui International was announced four months ago. And if it's wrong, well, it'll definitely back Shuanghui's second bid for Smithfield.

Activist hedge fund Starboard Value LP said it is working with investors interested in paying "substantially" more for Smithfield Foods Inc than the price China's Shuanghui International Holdings Ltd had agreed to.

Starboard, a New York-based fund that holds a 5.7 percent stake in Smithfield, said in a letter to the company's shareholders on Tuesday that it had received "nonbinding written indications of interest" from other parties willing to pay more than the $34 per share cash deal proposed by Shuanghui….

Starboard said it would vote against the merger in part to get Smithfield to push back the Sept. 24 special meeting, as the company's board of directors is "only permitted to consider alternative acquisition proposals that are received prior to shareholder approval" of the Smithfield-Shuanghui merger at the meeting.

According to the terms of the proposed deal, it must be closed by Nov. 29….

"It is our belief that the proposed merger undervalues Smithfield and that with more time an alternative proposal to the board at a superior price for shareholders could be available," Starboard wrote in the letter.

The hedge fund acknowledged that if a more lucrative acquisition bid could not be finalized and presented, it would vote in favor of the Shuanghui bid.

Starboard lines up rival buyers for Smithfield Foods [Reuters]
Starboard Stirs Pot on Smithfield's Deal with China's Shuanghui [WSJ]

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