010153 Tyson Extends Cash Offer in IBP Deal

Little Rock, AR - Poultry giant Tyson Foods has again extended the deadline of its $3.2 billion cash and stock offer for meatpacking heavyweight IBP Inc. after learning of a review of IBP's financial statements by the Securities and Exchange Commission.

IBP, Dakota Dunes, S.D., released a statement on Thursday calling the SEC review “routine,” but analysts weren't convinced of that assessment.

IBP said the SEC was requesting “clarification on some recent filings ... as well as financial information on recent acquisitions.” The company plans to file a response to the SEC's questions on Friday.

Tyson first extended its offer on Jan. 17 to give the Justice Department more time to review the proposed transaction. The offer, which would have expired on Wednesday, is now good until Feb. 7.

Tyson agreed to buy IBP for $3.2 billion in cash and stock on Jan. 1, defeating rival suitor Smithfield Foods in a bidding battle. At the time, Tyson spokesmen said the purchase will triple the company's annual sales to an estimated $24 billion a year and make it the nation's leading poultry, beef and pork producer. Springdale-based Tyson will also assume $1.5 billion in IBP debt.

IBP spokesman Gary Mickelson refused to comment on how this latest development could affect IBP shareholders or the value of the company.

Tyson spokesman Ed Nicholson also refused to discuss the matter in detail saying only that the company is monitoring the issue.

“The only thing that should worry shareholders at this point is if there is something seriously wrong,” said analyst Berry Summerour of Stephens, Inc. Summerour said the SEC's concerns, whatever they may be, could affect the overall value of IBP.

“If this thing doesn't go through, Tyson is still a great company,” Summerour said. “But a lot of people have been buying IBP stock with the assumption of this acquisition going through.”

Prudential analysts said the developments could open the door for Smithfield Foods to jump back into the bidding.

Smithfield spokesman Jerry Hostetter said there has been no discussion of getting back into the bidding battle.

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