Pilgrim's Pride Corp. on said it will use proceeds from a stock offering to buy out ConAgra Foods Inc.'s 23.2 percent stake in the poultry producer

Food & Drink Weekly, August 15, 2005

Pilgrim's Pride Corp. on said it will use proceeds from a stock offering to buy out ConAgra Foods Inc.'s 23.2 percent stake in the poultry producer. The company reached an agreement with underwriter Lehman Brothers to offer 15.4 million of its common shares for a total consideration of about $522.9 million.

Pilgrim's Pride is planning to repurchase the same amount of stock held by ConAgra for about $482.4 million. Those shares will be immediately canceled and will not dilute earnings or increase outstanding stock, the company said, adding that proceeds of about $40.5 million from the transaction will be used for general corporate purposes. Separately ConAgra, the top U.S. food producer, said it anticipates recording a pretax gain of about $333 million on the sale during the first quarter of fiscal 2006. In 2003, ConAgra sold its chicken-processing operations to Pilgrim's Pride for $300 million in cash and 25.4 million common shares. ConAgra began liquidating its holdings by shedding 10 million Pilgrim's Pride shares for $282 million last December.