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Stock Market & Financial Investment News

News Breaks
June 9, 2014
10:27 EDTHSH, TSN, PPC, PFTyson knocks Pilgrim's out of Hillshire bidding with new offer
Shares of food processor and distributor Hillshire Brands (HSH) are rising after Tyson Foods (TSN) submitted an increased offer to acquire the company, prompting rival Pilgrim's Pride (PPC) to withdraw its own takeover proposal. WHAT'S NEW: Tyson submitted a unilaterally binding offer to acquire all outstanding shares of Hillshire for a price of $63 per share in cash. The offer was subject to Hillshire being released from its existing agreement to acquire Pinnacle Foods (PF) in accordance with the terms. The all-cash transaction is valued at approximately $8.55B including Hillshire's outstanding net debt and represented a multiple of 16.7x trailing 12 months adjusted EBITDA or 10.5x including $300M in synergies. Tyson said it expects that the proposed transaction would be marginally accretive to EPS on a cash basis in the first full fiscal year after completion and substantially accretive thereafter. The offer was unanimously approved by Tyson's board. Hillshire responded to Tyson by confirming that it received its competitor's offer, but the company's board has not approved the offer, has not changed its recommendation regarding the Pinnacle merger and isn't making any recommendation with respect to the Tyson offer. Hillshire said it does not have the right to terminate the merger pact with Pinnacle on the basis of the Tyson offer or enter into an agreement with Tyson prior to the termination. In response to Tyson's announcement, Pilgrim's Pride withdrew it's proposal to acquire Hillshire Brands and said it realized that it was in the best interest of its shareholders not to increase its proposed price of $55.00 per share in cash for Hillshire. WHAT'S NOTABLE: During Tyson's conference call which discussed its offer to acquire Hillshire, the company said the deal would double prepared foods sales from 18% of revenue and quadruple operating income from prepared foods to 20% from 5%. Tyson believes it can realize significant annual synergies in excess of $300M by year three and has been thinking for "a lot of time" about Hillshire. Tyson expects the combined company's weighted average interest cost to be roughly 3.5% and noted that ROIC would drop below 20% in the first year, but says the company is "committed" to a ROIC target of 20%. Tyson foresees EPS to return to an annual growth rate in excess of 10%. Tyson confirmed that Hillshire is not allowed to accept the offer until the deal with Pinnacle is terminated. PRICE ACTION: During morning trading, shares of Hillshire Brands rose 5% to $61.85. Meanwhile, Pinnacle Foods rose 0.8% to $31.81, Tyson Foods fell 5% to $38.08, and Pilgrim's Pride fell 6.4% to $24.60.
News For HSH;TSN;PPC;PF From The Last 14 Days
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July 29, 2014
08:42 EDTTSN, PPCPilgrim's Pride price target raised to $30 from $25 at Stephens
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July 28, 2014
12:21 EDTPPC, HSH, TSNOn The Fly: Midday Wrap
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11:58 EDTHSH, PPC, TSNPoultry leaders Tyson, Cal-Maine diverge after quarterly reports
Shares of two leaders in the poultry industry, Tyson Foods (TSN) and Cal-Maine Foods (CALM), are moving in opposite directions following their respective quarterly reports. Tyson, a food production company specializing in chicken and other proteins, were up after the company reported better than expected third quarter revenues, while shares of egg provider Cal-Maine are cracking after the company said it was "cautiously optimistic" about having a good start to full-year 2015. TYSON: Tyson Foods' adjusted Q3 earnings per share was 75c, which fell below analysts' consensus of 78c. The food provider's Q3 revenue was $9.68B, which exceeded analysts' consensus of 9.47B. In terms of guidance, Tyson guided fiscal year 2014 revenue to grow to $38B, compared to analysts' estimates of $36.85B. Tyson expects FY15 EPS growth of at least 10%. Analysts are expecting the company's FY15 EPS to be $3.16. The company sees FY15 revenue of $42B, above the analysts' consensus of $38.75B. Tyson Foods said that it expects fiscal year 2015 domestic protein production to increase 1% and also expects grain supplies to increase during the fiscal year, which should result in lower input costs as well as decreased costs for cattle and hog producers. U.S. chicken production is expected to increase around 2% in FY15 compared to FY14. The company expects lower feed costs for chicken in FY15 and said the Chicken segment's operating margin should be at or above 10% in FY15. Tyson also announced that has reached a definitive agreement with to sell its poultry businesses in Mexico and Brazil to Pilgrim's Pride (PPC), whose majority owner is a wholly owned subsidiary of JBS SA (JBSAY). On its earnings conference call, Tyson backed its FY14 EPS view of "at least" $2.78, versus analysts' estimates of $2.91, and called 2015 earnings guidance "conservative." The company said the Hillshire Brands (HSH) acquisition is on-track to close in Q4 and sees synergies reaching $225M in 2015. CAL-MAINE: Meanwhile, Cal-Maine reported fourth quarter EPS of $1.30, which surpassed the consensus forecast of $1.15 from the two analysts covering the stock, according to First Call. The company's Q4 revenue was $371.6M, which was over $46M higher than the revenue it reported a year ago in the same period. Cal-Maine reported that it produced 195.63M total dozen eggs in Q4 and sold 249.44M total dozen eggs in the quarter. The company said its results reflect strong demand for shell eggs throughout the year from all the major market segments including retail, egg product and exports. Looking ahead to its FY15, Cal-Maine said that it is "cautiously optimistic" about a good start to the upcoming year. The company said current USDA projections for harvested acres and yields for both crops should be favorable for end users and help reduce feed costs in FY15. ANALYST REACTION: Sidoti downgraded Cal-Maine to Neutral from Buy due to valuation. The firm maintained its price target of $87 on the shares. PRICE ACTION: Near midday, shares of Tyson Foods rose $1.70, or 4.3%, to $41.24 and CalMaine foods fell $4.70. or 6%, to $74.59.
09:17 EDTTSNOn The Fly: Pre-market Movers
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09:10 EDTTSNTyson Foods says 2015 earnings guidance 'conservative'
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08:57 EDTPPC, TSNPilgrim's Pride to acquire Tyson Foods Mexican poultry business for $400M
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08:31 EDTTSN, HSHTyson Foods raises view of synergies from Hillshire deal to $500M
08:28 EDTTSN, PPCTyson Foods to sell Mexico, Brazilian poultry businesses to JBS S.A. for $575M
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08:23 EDTHSH, TSNTyson Foods sees Hillshire Brands synergies reaching $225M in 2015
08:20 EDTTSNTyson Foods backs FY14 EPS view of 'at least' $2.78, consensus $2.91
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08:03 EDTTSNTyson Foods says will not comment on, answer questions on stock, unit offerings
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07:45 EDTTSNTyson Foods files to sell 24M shares of common stock, 30M tangible equity units
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06:08 EDTTSNTyson Foods sees FY15 EPS growth of at least 10%, consensus $3.16
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06:08 EDTTSNTyson Foods sees FY14 revenue $38B, consensus $36.85B
Sees FY14 CapEx $600M-$650M; Sees FY14 net interest expense $130M. The company currently does not plan to repurchase shares other than to fund obligations under equity compensation program.
06:05 EDTTSN, HSHTyson Foods: Hillshire Brands acquisition on track to close in Q4
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06:05 EDTTSNTyson Foods expects FY15 domestic protein production to incresae 1%
Grain supplies are expected to increase in fiscal 2015, which should result in lower input costs as well as decreased costs for cattle and hog producers. U.S. chicken production to increase around 2% in fiscal 2015 compared to fiscal 2014. Expects lower feed costs for chicken in fiscal 2015 compared to fiscal 2014 of approximately $400M. The Chicken segment's operating margin should be at or above 10% in fiscal 2015. Expects to see a reduction of industry fed cattle supplies of 4-5% in fiscal 2015 as compared to fiscal 2014. Sees Beef segment's profitability will be similar to fiscal 2014. Expects industry hog supplies to increase around 2% in fiscal 2015 compared to fiscal 2014. For fiscal 2015, we believe our Pork segment's operating margin will be in its normalized range of 6%-8%.
06:03 EDTTSNTyson Foods reports Q3 adjusted EPS 75c, consensus 78c
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July 25, 2014
16:32 EDTTSNTyson Foods to close three plants to improve prepared foods performance
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14:46 EDTTSNTyson Foods technical commentary before earnings
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July 24, 2014
10:37 EDTHSHOptions with increasing implied volatility: TLM IP HSH
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