Starboard sees a crackling deal in break-up of Smithfield Foods

 
City A.M. Reporter
STARBOARD Value yesterday revealed a major stake in Smithfield Foods and urged the world’s largest pork producer to explore a break-up rather than going ahead with a planned $4.7bn (£3bn) takeover by Chinese meat company Shuanghui International.

The activist investor, now Smithfield’s biggest shareholder with a 5.7 per cent stake, said Smithfield might be worth “well in excess” of the $34 per share offered by Shuanghui if it split into hog production, pork and international units and shopped them separately.

Smithfield shares rose 0.9 per cent to $33.09, well below the sum-of-the-parts valuation of $44 to $55 per share that Starboard laid out in a letter to Smithfield’s board.

The planned Shuanghui purchase would be the largest by a Chinese company of a US firm to date.