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Pilgrim's Pride to Commence Tender Offer to Acquire Gold Kist for $20 Per Share in Cash

by 5m Editor
28 September 2006, at 2:10pm

US - Pilgrim's Pride Corporation today announced that it has notified Gold Kist Inc. that it intends to commence a tender offer to purchase all of the outstanding shares of Gold Kist common stock for $20 per share in cash.

The offer represents a 55% premium over Gold Kist's closing stock price on August 18, 2006, the last day of trading before Pilgrim's Pride notified Gold Kist's board of directors in a public letter that it was offering $20 per share in cash for the company. The transaction is valued at approximately $1 billion, plus the assumption of approximately $144 million of Gold Kist's debt.

The tender offer is scheduled to expire at midnight, Eastern Daylight Time, on Friday, October 27, 2006, unless extended.

"As we have stated on numerous occasions, we would have preferred to work together with Gold Kist and its board of directors to negotiate a mutually beneficial agreement for our respective shareholders, employees, business partners and other stakeholders," said O.B. Goolsby, Jr., president and chief executive officer of Pilgrim's Pride. "Unfortunately, Gold Kist has not taken any meaningful steps to reach such an agreement, and we have been forced to take our offer directly to Gold Kist shareholders. We believe that by giving the Gold Kist shareholders a chance to decide for themselves, they will find our $20 per share cash offer attractive and will seize the opportunity to maximize the value of their investment at a substantial premium to Gold Kist's share price prior to our offer."

The company has obtained financing for the tender offer through a combination of an amendment to its existing credit facility and a commitment letter for an additional credit facility from Lehman Brothers Inc.

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