Shareholder Urges Smithfield Split Over Buyout

smithfield activist investor straboard value buyout breakup china pork meat
Toby Talbot/AP

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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Originally published