JBS makes new bid for full control, delisting of Pilgrim's Pride

By Neil J Kanatt and ‌Andre Romani

SAO PAULO, ​Aug 18 (Reuters) - ​Brazil's JBS, the world's largest meatpacker, on Tuesday said it wanted to buy the remaining shares of Pilgrim's Pride, in a fresh attempt to seek ‌full control and a delisting of the U.S. poultry producer.

JBS, which already ⁠owns about 82% of Pilgrim's Pride, said it offered 2.086 JBS Class A shares for each Pilgrim's Pride ‌share. That represented a bid of $28.49 ‌per Pilgrim's share, in line with the stock closing price on Tuesday.

Pilgrim's Pride shares rose 7% in extended trading, with JBS up around 1%.

JPMorgan analyst Lucas Ferreira said he ​viewed the deal as positive from the standpoint of valuation between the companies.

"JBS shares are now better currency than cash for this purpose as relative value between the ⁠two entities look favorable and it does not pressure the balance sheet," he wrote in a note.

JBS agreed to buy ​a majority stake in Pilgrim's Pride in 2009 and tried to purchase the remaining shares of the U.S. firm in 2021. It later withdrew ​the proposal - in an all-cash deal, unlike the ‌current stock-for-stock bid - after the two companies failed to agree on a price.

Pilgrim's Pride has a market capitalization of about 6.8 billion, and its ⁠shares were down some 27% this year-to-date, having last week reached their lowest intraday level since February 2024.

At the same time, JBS' shares, which since last year are listed on the New York ⁠Stock Exchange, were down some 5% this year, resulting in a market cap of $14.6 billion.

JBS said the deal ​would lead to a simplified organizational structure, eliminating Pilgrim's standalone public company costs and giving more flexible and efficient capital allocation across the group.

The proposal is non-binding, and it is subject to review and ‌approval by a committee of Pilgrim's Pride's independent directors, and by its minority shareholders, JBS said.

Earlier this month, JBS announced Wesley Batista Filho ‌as new chief executive effective 2027 and an agreement to form a joint venture with Indonesia's sovereign ⁠wealth fund.

The proposal also comes days ‌after Pilgrim's Pride's agreement to ​acquire Walker's Deli & Sausage Company for about $142 million.

(Reporting by Neil J Kanatt in Bengaluru and Andre Romani in Sao Paulo; Editing by Diti Pujara and ‌Lincoln Feast.)

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