DEALTALK-Bids for sausage maker Hillshire are peaking -analysts
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By Lisa Baertlein
June 4 (Reuters) - Bids for sausage maker Hillshire Brands Co don't have much room to rise above current levels, analysts tell Reuters.
Pilgrim's Pride Corp sweetened its per-share bid on Tuesday to $55 from $45, beating Tyson Foods Inc's $50 offer.
Some analysts are betting the final deal will be around $60 per share, a view backed by investors, who have sent Hillshire's stock above $59.
"These are rich, rich offers," said Vicki Bryan, senior high yield analyst at corporate bond research service Gimme Credit. Bryan thinks bids for the seller of Jimmy Dean sausages and Ball Park hot dogs are nearing their peak.
Food deal valuations are hitting new highs, fueled by low interest rates and plenty of available capital.
Year-to-date, median multiples for food and beverage, as well as agriculture and livestock deals, are nearly 11 times the previous 12 month's earnings before interest, taxes, depreciation and amortization (EBITDA). That is the highest level since the full year of 2005, according to Thomson Reuters data.
The revised $55 bid from Pilgrim's implies a valuation of 14.5 times EBITDA for a total value of $7.7 billion, Bernstein Research analyst Alexia Howard said in a note Continuación...