Shuanghui’s $4.7bn deal close to receiving Smithfield Foods shareholder approval

Shuanghui International’s proposed $4.7bn deal to acquire US-based pork producer and processor Smithfield Foods is close to receiving approval from the latter’s shareholders ahead of the vote next week and is likely to be completed by 26 September.

The approval from shareholders will be a key milestone for the deal, while increasing pressure on activist investor Starboard Value, which holds a 5.7% stake in Smithfield Foods, to find an alternative buyer for the company.

The deal requires approval from over 50% of Smithfield shareholders, who are scheduled to vote in a special meeting on 24 September.

Shuanghui is well on its way to meeting that requirement with the votes that have been already received and it now expects the transaction to close by 26 September, reported Reuters citing sources familiar with the matter, who asked not to be identified.

If completed, it would pave the way for what is reportedly the largest ever takeover of a US company by a Chinese firm.

Hedge fund Starboard has been opposing the deal and has been working to bring alternative proposals. It previously said that it had received interest from certain third parties that would pay more than Shuanghui’s offer of $34 per share proposal.

The fund is expected to make an announcement later this week, though it is unclear whether this will include a counter proposal, according to other sources.

Starboard has stated that it would vote in favour of Shuanghui’s offer if a better alternative cannot be found.

Meanwhile, Shuanghui has gained proxy firm ISS’s consent and security clearance from the US Committee on Foreign Investment for the proposed deal.

---

Image: The proposed deal requires approval from more than 50% of Smithfield shareholders. Photo courtesy of antpkr.