March 7 Continental Grain Co, one of the biggest
shareholders of Smithfield Foods Inc, has sent a letter
to the board urging it to consider splitting the leading U.S.
hog producer into three units.
In a letter filed with the U.S. Securities and Exchange
Commission on Thursday, Continental Grain also said Smithfield
should consider initiating a regular cash dividend.
"There should be a regular dividend along the lines of what
competitors like Hormel or Tyson pay, which
would encourage a more stable shareholder base, while returning
capital to shareholders," Continental Grain, which owns about 6
percent of Smithfield stock, said in the letter.
It noted that since the current Smithfield management took
over in mid-2006, the company's stock has declined by 26 percent
while, including dividends, Tyson has returned about 70 percent
and Hormel has returned 131 percent.
The shareholder said it was willing to meet with
Smithfield's board and management to discuss its plan for the
Paul Fribourg, the head of Continental Grain Co, quit
Smithfield's board in September 2009 over a disagreement with
the company's plan at the time to issue $250 million worth of
shares of common stock.
Smithfield Foods, the nation's largest pork processor and
hog producer, could not immediately be reached for comment by
Reuters outside of regular U.S. business hours.
Privately-held Continental Grain, which was established in
1813, invests in agribusiness in the United States and