010824 Tyson, IBP Buyout Getting Underway

Springdale, AR - Tyson Foods and IBP executives said the combined company is on the way to fusing operations.

“There have been several twists and turns during the past few months,” Tyson chairman and chief executive John Tyson said in a conference call. “We're glad to be here.”

A Delaware judge cleared the way for Tyson Foods Inc.'s cash tender offer of IBP Inc., approving a modified settlement agreement with IBP shareholders.

As part of the agreement, investors who dumped shares of IBP last spring after Tyson attempted to call off the merger will be able to sue the Springdale, Ark.-based chicken processor in federal court.

The deal also allowed the roughly $1.6 billion tender offer, the first step of the acquisition of the Dakota Dunes, S.D.-based meatpacker, to close immediately.

Tyson announced in January a deal to buy IBP for $3.2 billion and assume $1.5 billion in IBP debt.

But Tyson called off the deal in March, alleging IBP kept the poultry processor in the dark about its accounting irregularities. IBP filed suit to force the merger, and a judge found that because there was no legal basis to terminate the deal, the merger had to go through.

Tyson said the new entity expects earnings of 90 cents to $1 per share for fiscal 2002.

He said that includes $50 million in savings from combining the companies, and predicted the figure could grow to $200 million by the new company's third full year.

Tyson also announced some management changes Tuesday and said more will follow by October.

Greg Lee and Richard Bond will share the role of chief operating officer. Lee held the role for Tyson, while Bond was also president for IBP.

Robert L. Peterson, IBP chairman and chief executive officer, will retire but remain on the combined company's board of directors, Tyson said.

He said personnel and operating changes, everything from customer service lines to transportation, are still being worked out.

Over the next month or two, executives will decide what assets should be kept and what can be sold.

Remaining paperwork for the buyout should be completed within the week, company officials said, and the deal will close 60 days later.

In trading Tuesday on the New York Stock Exchange, shares of Tyson fell a penny to close at $10.50, and shares of IBP were unchanged at $24.60.

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