The Smithfield board of directors unanimously recommends that shareholders approve the proposal to approve the merger agreement. A special meeting of Smithfield shareholders will be held on Sept. 24 in Richmond, Va. Hong Kong-based Shuanghui, a majority shareholder of China’s largest meat-processing enterprise, proposed acquiring Smithfield for approximately $7.1 billion, including assumption of debt. Under the terms of the agreement, Shuanghui will acquire all of Smithfield’s outstanding shares for $34 per share in cash.
The deal is expected to close in the second half of 2013, but remains subject to certain conditions. However, the deal has been met with opposition. David Payne, a Smithfield shareholder, sued the company in June alleging the company denied shareholders crucial information about the buyout deal and that the purchase price undervalues the company. Several law firms launched investigations into Smithfield's board of directors to determine whether the board breached its fiduciary duties to stockholders by failing to shop the company before entering into the agreement. Other shareholders are still pursuing a strategy that would break up Smithfield.