Pilgrim's Pride to raise offer for Hillshire to $55 a share -WSJ

June 2 Mon Jun 2, 2014 9:03pm EDT

June 2 (Reuters) - Pilgrim's Pride Corp is planning to raise its offer for Hillshire Brands Co a week after it first offered to buy the maker of Jimmy Dean Sausages in a $6.4 billion deal, the Wall Street Journal reported on Monday, citing people familiar with the matter.

Hillshire's shares were 2.8 percent higher in extended trading.

The new offer would value the meat company at $55 a share, according to one person, or more than $6.7 billion, the newspaper reported. (link.reuters.com/mur79v)

The new offer escalates a bidding war with Tyson Foods Inc , which entered the race just two days after Pilgrim's offer.

Representatives at both Pilgrim's Pride and Hillshire did not reply to an email outside of regular business hours.

Pilgrim's Pride, the world's second-largest chicken processor, last week offered to buy Hillshire Brands in an all-cash deal to expand its protein footprint with the latter's sausages and lunch meats.

Tyson Foods, the biggest U.S. meat processor, made a $6.3 billion offer, upstaging Pilgrim's $45 per share bid.

Tyson put the total value of its bid at $6.8 billion, based on 125 million outstanding Hillshire shares and debt of roughly $500 million.

Tyson Foods said it was aware of the report of a new offer from Pilgrim's, but it did not have a comment.

Hillshire's shares closed at $53.57 on the new York Stock Exchange on Monday. (Reporting by Shailaja Sharma in Bangalore; Editing by Ken Wills)