Meat Industry INSIGHTS Newsletter

971255 Canada's Maple Leaf ups offer for Schneider

December 23, 1997

Toronto - The family that controls Canadian meat processor Schneider Corp. rebuffed a sweetened bid by Maple Leaf Foods Inc., saying it was "irrevocably" committed to a rival buyout offer from U.S.-based Smithfield Foods Inc.

Toronto-based Maple Leaf late on Monday raised its bid for Schneider to C$29 ($20.30), or 1.767 Maple Leaf shares, for each Schneider share from C$22 ($15.40) a share, or 1.35 Maple Leaf shares.

Maple Leaf said its sweetened bid values Schneider at about C$198.5 million ($138 million).

Maple Leaf put Kitchener, Ontario-based Schneider in play on Nov. 5 with a cash offer of C$19 ($13.30) a share.

The latest bid came less than a week after the Schneider family, which controls the company, agreed to a C$170 million ($119 million) buyout by Norfolk, Va.-based Smithfield.

Under that deal, Smithfield would acquire Schneider in a swap of 0.5415 of its shares for each Schneider share. The Schneider family agreed to tender to Smithfield its 75 percent stake in the company it founded more than 100 years ago.

Schneider said on Tuesday the Schneider family did not accept the Maple Leaf offer because it "irrevocably agreed to deposit its shares under the offers to be made by "Smithfield

Schneider's board said it would give shareholders its formal response to the Maple Leaf bid by Jan. 2. The bid expires on Jan. 9.

Maple Leaf officials could not be reached for comment, but Maple Leaf Executive Vice-President Tom Muir urged the Schneider family to accept the latest offer, noting that it was about 115 percent above Schneider's stock price at the time of Maple Leaf's original bid.

Maple Leaf said it had entered into lock-up arrangements for 1.6 million shares or almost 27 percent of Schneider class A stock.

Mike Palmer, an analyst at Toronto brokerage Loewen Ondaatje McCutcheon, said Schneider's board had a fiduciary duty to protect shareholders by considering all bids, but that "the family has a perfect right to tender to whoever it pleases."

Schneider class A shares rose C$2 to C$25.50 on the Toronto Stock Exchange on Tuesday. Maple Leaf was up C25 cents to C$15.25 in Toronto, while Smithfield fell $1.19 to $3175 on Nasdaq.

This Article Compliments of...

Press Here for Info on Setting Your Own Web Site

[counter]

Meat Industry Insights News Service
P.O. Box 553
Northport, NY 11768
Phone: 631-757-4010
Fax: 631-757-4060
E-mail: sflanagan@sprintmail.com
Web Site: http://www.spcnetwork.com/mii