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This Jan. 28, 2011 file photo shows Hillshire Farm sausage on display at a grocery store in Palo Alto, Calif. (Paul Sakuma/AP)
This Jan. 28, 2011 file photo shows Hillshire Farm sausage on display at a grocery store in Palo Alto, Calif. (Paul Sakuma/AP)

Pilgrim’s Pride tops Tyson Foods’ offer for Hillshire Add to ...

Pilgrim’s Pride Corp, the second largest U.S. chicken processor, raised its offer for Hillshire Brands Co, escalating a bidding war with Tyson Foods Inc for the maker of Jimmy Dean sausages.

Hillshire’s shares rose 9 per cent to $58.50 in premarket trading, after Pilgrim’s Pride said it raised its offer to $55 per share in cash from $45.

Reuters Jun. 03 2014, 12:54 PM EDT

Video: Pilgrim's steps up fight with Tyson over Hillshire

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Tyson Foods, the world’s second largest meat processor after Brazil’s JBS SA, has offered $50 per share in cash for Hillshire. JBS owns about 75 per cent of Pilgrim’s Pride.

Hillshire said on Tuesday it would “provide information” to both bidders and conduct talks with them.

Pilgrim’s Pride said its offer valued Hillshire at $7.7-billion, including debt. Tyson Foods’ offer values Hillshire at $6.8-billion, including $500-million in debt.

Pilgrim’s Pride said the raised offer represented a 49 per cent premium to Hillshire’s share price a day before Hillshire announced a bid for Pinnacle Foods Inc.

Hillshire said on May 12 that it planned to buy Pinnacle, the maker of Birds Eye frozen vegetables, in a deal valued at $4.3-billion, excluding debt.

The Wall Street Journal reported on Monday that Pilgrim’s Pride was planning to raise its offer for Hillshire. Tyson Foods told Reuters it was aware of the report, but did not have a comment.

The two offers, made last week, require Hillshire to terminate its deal with Pinnacle.

Some investors and analysts consider the Pinnacle deal unattractive because Hillshire would have to take on nearly $2.3-billion in debt.

Hillshire said on Tuesday it was neither making any recommendation with respect to the offers nor modifying or withholding its merger agreement with Pinnacle.

Growing global appetite for meat has increased merger and acquisition activity in the industry. Last year, China’s WH Group Ltd bought pork giant Smithfield Foods for about $5-billion.

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