A Pilgrim’s está em seu pior momento. Os Batista querem comprar os minoritários

JBS is once again pursuing the acquisition of Pilgrim’s Pride, the U.S. chicken producer it controls. After attempting to purchase minority shares in 2021 and receiving a "no" response, the Batista family company returned to the negotiating table this time offering approximately $1.2 billion in shares for the remaining 18% of Pilgrim’s.

JBS proposes to offer 2.086 of its own shares for each Pilgrim’s share, implying a value of $28.49 per share – essentially no premium over yesterday's closing price. In after-market trading, JBS shares rose 1.5%, while Pilgrim’s Pride shares jumped 5.3%. The offer still needs to be evaluated by an independent Pilgrim’s committee and approved by the majority of minority shareholders.

The deal is not contingent on JBS shareholder approval. The two companies' relationship began in 2009 when JBS took control of Pilgrim’s amid the company's Chapter 11 bankruptcy. The transaction, which valued Pilgrim’s at around $2.8 billion, marked JBS's entry into the U.S. chicken market. Since then, JBS has increased its stake to the current 82%, but tried (unsuccessfully) to acquire 100% in 2021.

That time, JBS initially offered $26.50 per share in cash, later increasing to $28.50 – a figure essentially identical to the one proposed yesterday. The offer was withdrawn in February 2022 after Pilgrim’s independent committee concluded the $28.50 was a significant undervaluation of the minority stake. However, this time the offer comes at a time of pressure on Pilgrim’s results.

In the second quarter reported at the end of July, the company's EBITDA fell nearly in half compared to the previous year, while margins dropped to 7.8% from 14.4% a year earlier. The reason: pressure on chicken prices, especially in the U.S. Europe's results were also impacted by the greater supply of cheaper pork. The pressure on the U.S. market continues in the third quarter.

Domestic U.S. chicken spreads are 40% lower than a year ago, according to BTG data. JBS's stock has lost 8.6% over the past twelve months, valuing the company at around $15 billion. Pilgrim’s Pride's stock has dropped 40.5%, valuing the company at $6.8 billion on the Nasdaq.