010462 Smithfield Proposes Offer for Schneider Corp.

Smithfield, VA - Smithfield Foods Inc. proposed a takeover by its Canadian subsidiary of food processing company Schneider Corp. for $47.9 million, or $20.25 a share.

Through its subsidiary Smithfield Canada Limited, Smithfield Foods already owns indirectly all of the common shares and about 60% of the Class A shares of Schneider.

Smithfield Foods said in a statement it was proposing the transaction after talks with certain institutional shareholders of Schneider who wanted to convert their Schneider shares into an investment in Smithfield Foods.

It said these shareholders held an aggregate of 2.37 million Schneider Class A shares or about 91% of the public float. Smithfield Foods said the shareholders had now also entered into irrevocable agreements to tender all of their Schneider Class A shares to its offer.

It said under the offer Smithfield Canada would offer to acquire all of the Class A shares of Schneider it does not already own on the basis of 0.5415 of an exchangeable share of Smithfield Canada, or at 0.5415 of a share of Smithfield Foods common stock, per Schneider Class A share.

The company added that each whole exchangeable share of Smithfield Canada was exchangeable for one share of Smithfield Foods common stock -- which ended Tuesday up 17 cents at $37.40 on the New York Stock Exchange.

Its offer is subject to at least 90% of the outstanding Class A shares, other than the Class A shares held by Smithfield Canada and its affiliates, being deposited in acceptance of Smithfield Food proposal and necessary regulatory approvals.

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