Continental Grain Co. is unloading its six per cent
ownership of shares in Smithfield Foods now that Shuanghui International
Holdings Ltd. is buying Smithfield for some $34 per share.
Shuanghui of Hong Kong, China, is spending
about $4.2 billion to buy the company, but is also assuming its debts and
values the total deal at $7.1 billion.
Continental Chairman and chief executive
officer Paul J. Fribourg said, “we have elected to exit our long-term ownership
position in Smithfield because we are satisfied with our investment return.”
Continental had been urging Smithfield to break
into three parts to improve value for shareholders. It noted that the
packing-plant part of the company has been losing money ever since Continental
bought its stake in 2006.
It bought that stake by trading its shares in
Premium Standard Farms, a huge hog-raising business that dove-tailed with
Continental’s grain-handling and feed-milling businesses.
Shuanghui’s offer of $34 per share is 31 per
cent higher than the stockmarkets price just before the deal was announced.
Just think how much money Canadians investors in J.M. Schneider Inc. would have pocketed had Smithfield not sold Schneiders to Maple Leaf Foods Inc.
Oh, well, Michael McCain, president and ceo of Maple Leaf, has to have some way to earn enough to foot the bill for the most expensive divorce settlement in Canadian history.
