Smithfield to Break Off Operations?Published by on
Smithfield Foods, Inc, the nation's largest hog producer and processor is looking into the possibility of breaking off operations, according to a report by Reuters news service.
This change comes from an appeal of one of Smithfield's largest shareholders, Continental Grain Co., which has a .8 percent stake in Smithfield. Apparently Continental wrote a letter to Smithfield earlier in the month, urging it to change its strategy and structure into three individual companies with the spin of potential higher profits as a result of breaking off hog operations. It was later reported Friday that Smithfield hired Goldman Sachs Group Inc to study the option of three companies - one focusing on selling the typical pork and packaged meats, another a hog farm business, and an international pork businesses with operations concentrated overseas in Spain, Poland and Romania.
Shares of Smithfield stock rose by more than $4-a-share to $26.41 after Continental's letter was released, raising the prospect that the company could be sliced into three. There are also predictions that such a suggested split could increase share value.