M&A Plays of the Day: Starboard Switches Up on Smithfield Deal

While we don't believe in paying too much attention to buyout rumors and speculating on potential takeover targets, Fools should definitely try to keep up with M&A news that is officially announced -- just in case they're material to our investing thesis.

What: Activist shareholder Starboard Value, which was trying to block the $4.7 billion sale of Smithfield Foods (UNKNOWN: SFD.DL2  ) to Chinese pork producer Shuanghui International, said in a regulatory filing on Friday that it couldn't find a better offer to bring to the table.

So what: As a result, Starboard -- which owns 5.7% of Smithfield -- said that it will now vote in favor of the deal "unless another proposal emerges," essentially removing the acquisition's last real roadblock. After all, Smithfield had already jumped its biggest hurdle when the Committee on Foreign Investment in the U.S. gave the purchase clearance earlier this month, so Starboard's concession pretty much just seals the deal.  

Now what: Smithfield shareholders are scheduled to vote on the acquisition on Sept. 24. "In light of the restrictions imposed by the merger agreement between the Issuer and Shuanghui, and the requirement of structuring a cash bid from a single entity, it proved challenging for the bidder group to formalize and deliver an alternative proposal prior to the special meeting," Starboard said in a Friday filing. "While we are confident that the Issuer could have received value in excess of that available pursuant to the Proposed Merger, we are not able to offer shareholders an alternative proposal at this time." So while Smithfield is likely all popped out at this point, meat peers like Hormel and Tyson Foods might be worth looking into for some hidden value.

More compelling opportunities
Dividend stocks can make you rich. It's as simple as that. While they don't garner the notoriety of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2647221, ~/Articles/ArticleHandler.aspx, 12/20/2014 1:05:23 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement