June 3 - Pilgrim's Pride upped its bid for Hillshire Brands. Expect Tyson to come back with another bid, says an analyst. Fred Katayama reports.
Pilgrim's Pride isn't chickening out. It upped its bid for Hillshire Brands to $55, topping Tyson's $50 offer. And that's $10 more than what Pilgrim's originally offered before Tyson jumped in with a rival bid. Now, the producer of Hillshire Farms deli meats and Jimmy Dean sausages says it'll hold separate talks with both suitors. Hillshire's board said it's not making recommendations on the two unsolicited bids at this stage. Pilgrim's now values its latest offer at $7.7 billion, $900 million more than Tyson's bid. The brawl erupted after Hillshire agreed to buy Pinnacle Foods last month. Both Tyson and Pilgrim's Pride insist Hillshire dump its deal with Pinnacle. But Hillshire's board said it isn't withdrawing or changing its recommendation on that merger agreement. Wells Fargo Securities analyst John Baumgartner says "Pilgrim's Pride's synergy estimate, combined with Tyson's stated desire to own Hillshire's assets and perceived incremental financing capability, suggests potential for another bid in response." Investors expecting more feathers to fly, fueling a further spike in Hillshire's stock.