Smithfield, Continental wrangle over shareholder value
SMITHFIELD, Va. – Smithfield Foods Inc. acknowledges it has received a copy of Continental Grain Company’s presentation earlier today in which it urged Smithfield Foods to split into three independent businesses in order to maximize shareholder value. (Read Continental Grain presses for Smithfield split). But C. Larry Pope, president and CEO of Smithfield, iterated this afternoon that his company is committed to review every alternative to increase long-term value for all shareholders.
Pope said the mega-processor previously reviewed and responded to Continental Grain's March 7 memorandum to the company's board of directors, which contained many of the same points contained in today's presentation. The response can be found in Smithfield's April 1, 2013 investor presentation.
"Our number one priority is to create long-term value for our shareholders, and we welcome the perspectives of all of our investors,” Pope said. “Consistent with this objective, we are continuing to review Continental Grain's presentation and will provide a specific response in due course.
"Our board and management are focused on the implementation of our growth strategy that is working,” he added, “We recently delivered the two best years of operating performance in our company's history, we have restructured and streamlined our Pork segment, drastically de-levered our balance sheet, returned significant cash to shareholders and reduced commodity exposure. As a result of our work, our stock price has nearly doubled since 2009 when Continental Grain resigned from our board.”
Pope continued that Smithfield believes Continental Grain's analysis of the benefits of a divestiture of the company's Hog Production business and select European assets, which they have made before, is “inherently flawed,” based on an intensive and ongoing review of these and other alternatives by the board, management and Smithfield’s financial and legal advisors.
"Smithfield's board, consisting of a balanced mix of directors who know our industry well, has a strong track record of taking aggressive action to enhance value for all shareholders," Pope concluded.