001270 IBP to Review Tyson's Sweetened BidDecember 30, 2000Chicago - Beef processor IBP Inc. said that it would evaluate a sweetened takeover offer from Tyson Inc. even as Tyson shares dipped, potentially lessening the value of the half-cash, half-stock bid. Shares of Tyson were down 7/16, or 3.43%, at $12-5/16 Friday, leaving the shares once again below the $12.60 bottom of a collar Tyson put in place to protect IBP shareholders from a decline in Tyson's stock price. If Tyson's price fell below $12.60 a share for a certain period, IBP shareholders would receive a maximum of 2.063 Tyson shares. Springdale, Ark.-based Tyson said it would pay $27 a share in cash and stock for IBP, up from its previous offer of $26 a share. The deal was valued at $2.9 billion Thursday evening, before the dip in Tyson's stock price. “The special committee of IBP's board of directors is aware of Tyson's improved offer and will be evaluating it with the help of outside counsel,” Gary Mickelson, a spokesman for Dakota Dunes, S.D.-based IBP said. IBP has set up a special committee of directors to evaluate bids for the company by IBP and Smithfield, Va-based Smithfield Foods Inc. IBP shares were up 10/16, or 2.41%, at $26-9/16 and Smithfield was up 7 cents, or 0.23%, at $30.92. IBP already has a friendly $2.4 billion pact with DLJ Merchant Banking to take the company private, but that agreement is expected to be terminated in favor of a deal with Tyson or Smithfield, which has offered $25 a share in stock and also is expected to sweeten its price. Smithfield, the world's largest hog and fresh pork producer, declined to comment on the latest Tyson bid Friday. Both bidders are interested in IBP as a way to broaden their product offerings and give them more clout with retailers. Farmers, agricultural officials and consumer activists are concerned a purchase of IBP by either Tyson or Smithfield would be anti-competitive. Indeed, Tyson also said Thursday the Department of Justice was seeking additional information about its proposed offer. Known as a “second request,” the development means regulators are concerned about potential anti-competitive implications of a transaction between two companies. Most Wall Street experts had anticipated Tyson would receive a second request. Smithfield also has filed for antitrust approval on its offer, and also is expected to get a second request. To alleviate some of those concerns, Tyson offered to assume all risks associated with antitrust issues and said it would pay IBP a $70 million break- up fee if the deal did not get completed because of antitrust concerns. It also said it would not require a break-up fee from IBP.
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