NEW YORK (AP) - One of Smithfield Foods' largest shareholders says a $4.72 billion takeover bid from China's largest meat producer falls short of what the company would be worth if sold off piece by piece.
New York-based investment firm Starboard Value LP, which owns about 5.7 percent of Smithfield's common stock, estimated the Smithfield, Va.-based pork producer's value at $9 billion to $10.8 billion, or about $44 to $55 per share.
Under the deal struck last month with Shuanghui International Holdings Ltd., Smithfield will sell itself for $34 per share. That deal remains subject to regulatory and shareholder approvals.
Smithfield Foods released a statement Monday afternoon that said the company received a letter from Starboard Value LP earlier in the day and will review it. It also reaffirmed its recommendation that its shareholders approve the merger.
"Smithfield is committed to maximizing value for its shareholders," read the Smithfield release. " ... The strategic combination with Shanghui provides Smithfield shareholders with significant, immediate and certain cash value for their investment. ... The [Smithfield board of directors] unanimously believes that the transaction with Shuanghui is in the best interests of the company, its shareholders and all Smithfield stakeholders."
Starboard said that while the deal with Shuanghui does offer some value, shareholders would be better served if the company focused on selling off its various divisions.
Smithfield shares rose 2 percent in premarket trading Monday.
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