Gold Kist accepts Pilgrim's Pride's $1.1 billion merger bid

Gold Kist accepts Pilgrim's Pride's $1.1 billion merger bid

Pilgrim's Pride Corporation is to acquire the outstanding shares of Gold Kist common stock for $21 per share in cash. The transaction, which was unanimously approved by the boards of directors of both Pilgrim's Pride and Gold Kist, is valued at $1.1 billion, plus the assumption of approximately $144 million of Gold Kist's debt.

The Pilgrim's Pride offer represents an approximately 62% 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 to purchase the company.

Pilgrim's Pride expects to achieve approximately $50 million of annualized synergies, primarily from the optimization of production and distribution facilities and cost savings in purchasing, production, logistics and SG&A (selling, general and administrative expenses). Pilgrim's Pride predicts the acquisition will increase the company's diluted earnings per share after the first full year of operations.

A.D. Frazier, chairman of Gold Kist, said: "After careful consideration, the special committee of independent directors, as well as our entire board, determined that the Pilgrim's Pride enhanced offer is in the best interests of our shareholders, employees, growers and customers.

"Since becoming a public company more than two years ago, Gold Kist has made significant progress in achieving its business goals. We look forward to working with the Pilgrim's Pride board and management on a smooth integration, and we recommend that all stockholders embrace this transaction by tendering their shares into the premium offer."

Together, Pilgrim's Pride and Gold Kist will create the world's leading chicken company in terms of production and the third-largest US meat protein company by revenues. The combined company will have a broad geographic reach and customer base, while maintaining a balanced portfolio of fresh chicken and value-added products.