Continental Grain sells Smithfield stake
Continental Grain sells stake in Smithfield, backs $4.7 billion takeover by Shuanghui
NEW YORK (AP) -- Continental Grain Co., one of Smithfield Foods Inc.'s largest shareholders, said Monday that it supports the proposed takeover of the pork producer by a Chinese company and has sold the bulk of its stake in Smithfield.
Continental Grain has been pushing Smithfield to consider splitting itself up to reward shareholders.
Smithfield, one of the biggest pork producers in the U.S., agreed last week to be acquired by Shuanghui International Holdings Ltd., the majority shareholder in China's largest meat processor, for about $4.72 billion.
The deal must win approval by Smithfield shareholders and is expected to face scrutiny by U.S. regulators. It comes at a time when China has had serious food safety concerns, some of which have included Shuanghui.
"We have been advocating for value creation and are pleased that the Smithfield board of directors and management are being proactive in realizing value for the benefit of all of its shareholders," said Continental Grain CEO and Chairman Paul J. Fribourg said in a statement late Monday. The privately held grain company said it was exiting its stake in Smithfield because it was "satisfied" with the return on its investment, which began in 2007.
The company had held 8.1 million shares of Smithfield, or 5.8 percent of the company's outstanding stock as of April 25, according to FactSet. In a filing with the Securities and Exchange Commission Monday, Continental Grain appeared to have sold nearly all of its holdings in Smithfield Foods since Thursday.
A representative for Continental Grain could not be reached immediately for comment.
Shares of the Smithfield, Va., company increased 4 cents to close regular trading at $32.98 and slipped 8 cents in after-hours trading.
