Sayonara, Pilgrim’s Pride
Attention all you chicken lovers! In the not-too-distant future, Pilgrim’s Pride (NASDAQ:PPC), formerly known as Pilgrim’s Pride, will cease to exist as an independent company.
Pulled from bankruptcy in September 2009 when Brazil’s JBS S.A. (PINK:JBSAY) purchased 67.3% of its stock for $800 million, the world’s biggest beef producer has increased its control position to 75.3% with an additional $117 million investment. Already sitting on an unrealized profit of $741 million, the Brazilian company is likely to purchase Pilgrim’s remaining outstanding shares through its JBS USA subsidiary and then take the merged entity public.
With the lion’s share of JBS S.A.’s revenues in the U.S., it makes sense to have a major listing here. The big question at this point is whether the Pilgrim’s name remains as the public company. JBS is well known in most parts of the world, so I’d say there’s more than a 50/50 chance that Pilgrim’s 26-year run as a public company is just about over. I’d be shocked if it didn’t happen in the next 12 to 24 months.
Any way you slice it, though, the deal goes down by 2020.
At the time of publication, Ashworth had no positions in the securities mentioned.