Smithfield says separation of hog business not a good idea
April 1 (Reuters) - Smithfield Foods Inc, the largest U.S. hog producer, said in a regulatory filing that separating its hog production unit will make it less competitive, responding to shareholder pressure to split up its businesses.
"Separation of hog production only will leave behind cyclical fresh pork with packaged meats," the company said in a investor presentation. ()
The company's shares were down 1.85 percent at $25.99 on the New York Stock Exchange on Monday.
Reuters reported in March that Smithfield had hired Goldman Sachs Group Inc to help it weigh options after a key shareholder had urged the company to break itself up.
Continental Grain, an agribusiness company and one of its biggest shareholders, had sent a letter to the board early in March, urging it to consider splitting the company into three units.
JP Morgan analyst Ken Goldman said the company's latest move indicates a potential struggle between Smithfield and certain investors of the more activist variety.
"If Smithfield were still exploring the break-up option, why would it issue this release, which appears to be a set of arguments based on a thoughtful analysis to keep the company as is," Goldman said.