Smithfield Foods to review split-up suggestion
NEW YORK (AP) -- Shares of Smithfield Foods rose on Friday after the company said it would review a recommendation by a shareholder that the meat producer should consider splitting up the company.
Continental Grain Co., which has a 5.8 percent stake in the company, said in a letter to the board that the company might make more money if it splits up into three units -- a hog producing unit, fresh pork and packaged meat business and an international company. The suggestion was disclosed in a Securities and Exchange Commission filing on Thursday.
Continental also urged Smithfield Foods to continue its share repurchase program, initiate a regular cash dividend, add directors to its board that have a background in agribusiness management and other related skills, and make changes in management
"It's time for Smithfield to get serious about creating shareholder value," the company said in the letter.
In a statement Friday, Smithfield Foods said it would review the suggestions "in due course."
In its most recent quarter, the Smithfield, Va.-based company, whose brands include Armour, Farmland and its namesake, on Thursday reported its net income rose more than 3 percent, helped by gains in packaged meats, hog production and international business.
Shares rose $1.03, or 4.2 percent, to $25.73 in midday trading, after rising as high as $26.07 earlier in the session, its highest level since August 2008.
Copyright 2013 The AP.