(Reuters) - Hillshire Brands Co said it will withdraw its recommendation to its shareholders to vote for its acquisition of Pinnacle Foods Inc, following Tyson Foods Inc’s offer to buy Hillshire.
Tyson, the largest U.S. meat processor, last week said it would buy Hillshire for $63 per share, valuing the company at $8.55 billion.
Hillshire said it does not have the right to terminate the merger agreement with Pinnacle Foods on the basis of the Tyson Foods offer.
If Pinnacle Foods terminates the deal before Hillshire stockholders vote, Pinnacle may be entitled to a termination fee of $163 million.
Tyson said it was pleased that the Hillshire board had withdrawn its recommendation in favor of the Pinnacle agreement.
“We hope Pinnacle Foods will promptly accept the termination fee and not delay the ability of Hillshire Brands’ shareholders to benefit from Tyson Foods’ superior offer,” the company said in a statement.
Hillshire expects to hold its stockholder meeting as early as August. The company will have the right to end the Pinnacle merger on Dec. 12 regardless of whether a shareholder vote takes place.
Reporting by Sruthi Ramakrishnan and Shailaja Sharma in Bangalore; Editing by Joyjeet Das