Pilgrim’s Pride stock jumps on JBS buyout proposal

On Wednesday, Pilgrim’s Pride Corporation (PPC) shares experienced a significant increase of 6.9% in premarket trading following JBS N.V.'s submission of a non-binding proposal to acquire the remaining 18% stake in the poultry producer that it does not already own. JBS currently holds around 82% of Pilgrim’s Pride.

The proposed exchange ratio stipulates that for each PPC share, JBS would offer 2.086 of its Class A common shares. This transaction is contingent on approval from a special committee of independent directors to be appointed by the PPC Board, as well as a majority vote from shares not held by JBS or its affiliates, along with standard closing conditions.

JBS and PPC have been collaborating for over 16 years, with PPC expanding its operations, bolstering its global presence, and achieving substantial revenue growth. Jeremiah O’Callaghan, Chairman of JBS Board of Directors, expressed optimism, stating that the proposal offers PPC stockholders the chance to continue benefiting from PPC’s future performance through JBS ownership, providing exposure to a larger and more diversified global business.

Upon completion, Pilgrim’s Pride shares would cease trading on Nasdaq and would be deregistered. The transaction does not necessitate shareholder approval from JBS. JBS highlighted potential advantages such as continued participation in PPC’s business performance within a larger global multi-protein platform, streamlined organizational structure resulting in cost savings from eliminating standalone public company expenses, and increased trading liquidity due to JBS’s larger market capitalization.

Citi is serving as financial advisor, while White & Case LLP is acting as legal advisor to JBS. This report was AI-generated and reviewed by an editor.