Shareholder Urges Smithfield Split Over Buyout
By Nat Rudarakanchana
Activist investor Starboard Value is pushing Smithfield Foods to split itself up and offer itself to other bidders, rather than proceed with a $4.7 billion takeover by China's Shuanghui International Holdings.
In a letter to the Smithfield board obtained by The Wall Street Journal, Starboard Chief Executive Jeffrey Smith argues that Smithfield could be worth $7.1 billion, if split off correctly.
That means the company could be bought out at $44 to $55 a share, instead of Shuanghui's offer of $34 a share.
According to the letter, Starboard has taken a 5.7 percent stake in Smithfield Foods (SFD), making it one of the company's largest investors.
Smithfield and Shuanghui declined to comment to the Journal.
Smithfield opposed a similar push earlier this year by Continental Grain Co., which also argued for a Smithfield breakup in March.
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