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Major shareholder balks at bid


By Michael Felberbaum

AP Business Writer

RICHMOND, Va. (AP) — One of Smithfield Foods Inc.’s largest shareholders says a $4.72 billion takeover bid from China’s largest meat producer falls short of what the company would be worth if sold off piece by piece.

In a letter to the Smithfield, Va.-based pork producer’s board of directors on Monday, the New York-based investment firm Starboard Value LP estimated the company’s value at $9 billion to $10.8 billion, or about $44 to $55 per share. Starboard owns about 5.7 percent of Smithfield’s common stock.

Under the deal struck last month with Shuanghui International Holdings Ltd., Smithfield will sell itself for $34 per share. The deal, which remains subject to regulatory and shareholder approvals, would be the largest takeover of a U.S. company by a Chinese firm, valued at about $7.1 billion, including debt. Smithfield’s stock will no longer be publicly traded once the deal closes, which is expected in the second half of the year.

Smithfield did not immediately comment on Starboard’s letter and a spokesman for Shuanghui declined to comment.

Starboard said that while the deal with Shuanghui does offer some value, shareholders would be better served if the company focused on selling off its various divisions, which include fresh pork and hog production businesses, as well as an international division.

Smithfield’s brands include Springdale-based John Morrell, Armour, and its namesake.


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