UPDATE 2-Smithfield board to review advice from big shareholder
March 8 (Reuters) - Smithfield Foods Inc said on Friday it would review a letter from shareholder Continental Grain Co, which is urging the top U.S. hog producer to consider steps such as splitting into three units and initiating a regular cash dividend.
Shares of Smithfield rose 3.3 percent to $25.50 in premarket trading.
Smithfield said it had received the Continental Grain letter but did not discuss the details. Continental made the letter public on Thursday, revealing its recommendations for Smithfield.
Continental Grain is among Smithfield's largest shareholders. Collectively, Continental Grain and its affiliates own 8,391,653 shares of Smithfield, or a stake of roughly 6.05 percent, according to a filing with the U.S. Securities and Exchange Commission on Thursday.
Continental Grain sold a number of Smithfield shares in January and this month, including the sale of 417,000 shares on March 7 at an average price of $24.194 per share, the filing showed.
"While we have reduced our position, we continue to hold an important stake and are prepared to maintain a significant holding if we see the board and management taking the necessary steps to unlock the value we believe exists in this company," Continental Grain said in its letter to the board, which was included in the filing.
Smithfield said its board would review the letter from Continental Grain in due course, in consultation with financial and legal advisers.