China/US: Shareholder group letter threatens Shanghai’s record buyout of Smithfield

The massive buyout of Smithfield Foods by China-based Shanghai International Holdings – a deal that would be the largest takeover of a US company by a Chinese firm – could be in jeopardy as a shareholder group told Smithfield it could potentially find buyers to acquire the company for “substantially” more than what the Chinese company is willing to pay.

Reports say investor group Starboard Value told Smithfield shareholders it is seeking potential buyers for the company to offer a superior bid over Shanghai International’s $4.7 billion offer.

Shanghai and Smithfield announced the deal last May.

According to reports, the letter sent by Starboard Value, which owns a 5.7 percent stake in Smithfield, is suggesting a restructuring of the company into three parts – hog farms, pork sales and international operations – that would allow the company to demand a higher price. Starboard is seeking a single bid or the company.

The investor is hoping to delay the shareholder vote for the company’s takeover, currently scheduled for September 24.

Full Content: USA Today

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