Survey: Hillshire Battle Ensues, What Do You Think?

The battle is not over.

Tyson TSN announced its intention to purchase Hillshire HSH for $6.8 billion ($50 per share) Thursday morning After Pilgrim’s PPC offered to buy Hillshire for $6.4 billion ($45 per share) Tuesday.

In addition to two unsolicited bids in one week, Hillshire had previously committed to acquiring Pinnacle Foods PF for $6.6 billion cash in addition to stock. If Tyson or Pilgrim’s acquire Hillshire, a $163 million termination fee will have to be paid to Pinnacle; both suitors have implied willingness to pay the fee.

Just hours after the Pilgrim’s offer was announced, Hillshire’s board announced that they would consider the offer, but that, “We continue to strongly believe in the strategic merits and value creation potential provided by the proposed transaction with Pinnacle Foods.”

Pilgrim’s boldness to make an offer for Hillshire while it was engaged with Pinnacle and Tyson’s swift counter offer suggest that the saga is far from over. Wall Street agrees.

Shares of Hillshire are trading at $52.62, 5.2 percent higher than Tyson’s offer and 16.93 percent higher than Pilgrim’s. The most plausible reason for this trading is the expectation that Pilgrim’s, or perhaps a third suitor, will jump in the pit with a higher offer.

Some are speculating that the next offer will be for $55, but a bidding war could make Hillshire’s takeout price even higher.

What do you think?