Lenders braced for food fight
(This story originally appeared on IFRe.com, a Thomson Reuters publication)
By Michelle Sierra, Joan Magee and Davide Scigliuzzo
NEW YORK, May 30 (TRLPC/IFR) - Wall Street firms are joining the sizzling four-party food fight involving Hillshire Brands, Pilgrim's Pride, Pinnacle Foods and Tyson Foods. Morgan Stanley, JP Morgan and Goldman Sachs are separately ready to serve the necessary financing to the winner.
Morgan Stanley is providing the committed financing backing meat processor Tyson Foods' unsolicited bid of US$6.8bn for food producer Hillshire Brands. Tyson also said it expected JP Morgan to join the facility in the "near future".
Meanwhile, Pilgrim's Pride, controlled by Brazilian meatpacker JBS, is lining up roughly US$6bn in debt to finance a hostile all-cash bid, valued at US$6.4bn, for Hillshire, and JBS's relationship banks are pitching financing options to the firm.
Separately, Goldman Sachs is providing US$5.3bn in loans to back the US$6.6bn combination of Hillshire and branded food producer Pinnacle Foods that was announced two weeks ago. The facility consists of a US$500m revolving credit facility and a US$4.8bn senior secured Term Loan B, according to a regulatory filing.
HUNGRY, HUNGRY BANKERS
The four-way tug-of-war may stem from the lack of good quality assets still available in the food and beverage market, bankers said. The accessibility to cheap financing is further enhancing M&A activity in the sector. Continuación...