Pilgrim's Pride Offers to Pay $5.5 Billion for Hillshire Brands

The potential deal complicates Hillshire’s plan to buy Pinnacle Foods for $4.3 billion.
3:28 | 05/27/14

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Transcript for Pilgrim's Pride Offers to Pay $5.5 Billion for Hillshire Brands
And it is Tuesday may 27 in today's big number five and a half billion dollars that is how much pilgrims prize offered to pay for those sharp brands. It's a situation that is greatly complicating -- fires four point three billion dollar offer to buy pinnacle foods. And when I'm Dan Cutler in New York so for. Here she was sort out this food fight -- -- -- -- finds joining us on this Tuesday morning. -- days what the details of this offer now we'll sort of -- the most recent and kind of do the back story. -- yes -- pinnacle is offered and it's unsolicited offer meaning its its hostile they haven't negotiated with those services are offered to buy -- -- For about 45 dollars per share it's a big premium to where that stock was trading by 25% premium to where was trading recently. A leading up to this weekend that is predicated on the idea that -- share. Exit its planned deal to acquire pinnacle foods are basically pilgrim says. It's better for you guys if we buy use and if you go ahead and make an expensive -- of pinnacle foods and this puts all these companies. To one degree or another in play in the market actually seems to think at least on the early read. That in fact up and Pilgrim's Pride has a decent shot of actually winning -- day here. The greater measure of what every two weeks ago we're talking on -- his own a mega mega deal there for for pinnacle foods so I mean. When you start to play this that how much are they gonna be -- factoring that in as far as you know that the price in the valuation of the company. -- Pilgrim's Pride to offer is explicitly predicated on hillside getting out of that deal so. To be -- pride says if you go through with that our deals not valid anymore so. This is why it's basically up to hills -- -- to re enter into negotiations. With Pilgrim's Pride and a potential deal and therefore get out of our agreement to purchase pinnacle. Or do we try to go ahead with pinnacle. And out you know presumably maybe. Comes -- decide to come back with a higher offer so this could be a lot of kind of an auction -- it's almost like after a three way auction that's going on right here. And in the market is basically saying you know Pilgrim's Pride stock is -- -- little because I think they liked the idea of them buying he'll -- coaster stock was indicated to be up quite a bit. On the prospect -- it's now in play as an acquisition target. Pinnacle foods down a little bit on the higher risk that basically does not -- acquired. And pilgrims -- exactly playing chicken pardon upon merit and on this whole deal there because they're calling it quote substantially superior. The Osiris deal to buy pentagon tigers in a bigger is better I mean -- yeah as you pointed out that and then Pilgrim's Pride winning out on this one. Well it looks like they at least have a decent argument for why that might be the case and what they're basically saying is look. Total prize based in the company phils are at its core is mostly meat company though it does a lot in a packaged foods area by the way he'll show -- is the old Sara -- its food business and that's where that comes from. And so they're saying it is a lot more efficiencies. If you look at putting these two -- meatpacking companies together. Then if he'll -- goes ahead and vice kind of approach which is mostly kind of a packaged foods grocery business. It's a different idea of exactly how to create value. And posed -- -- saying you know better to be what they -- on their press release a -- -- focused company. -- interest it okay what was the other system fallout. My schedule -- -- -- -- my thanks so much this Tuesday morning thank you of course and give -- latest headlines right here on abcnews.com. If you've been watching the big number. I'm Dan that's -- in New York.

This transcript has been automatically generated and may not be 100% accurate.

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