An activist hedge fund has hired financial advisers to promote an alternative to the proposed $4.7 billion sale of Smithfield Foods to China’s largest producer of pork.
The hedge fund, Starboard Value, wrote to Smithfield’s board last month, arguing that the company â€" whose brands include Armour and Farmland â€" was worth more split up in pieces than a sale of it as a whole to Shuanghui International of China for $34 a share. The all-cash deal was announced in late May and is currently being reviewed by regulators.
Starboard disclosed in a securities filing on Friday that it had hired the boutique investment bank Moelis & Company and BDA Advisors. In the filing, the fund said it had agreed
to pay each such financial advisor in consideration of their respective services performed a fee based and conditioned upon the appreciation of Starboard’s ownership position in the Issuer above $34 per share over a specified period of time and in accordance with the terms and conditions specified therein.
The filing also showed that Starboard, which in the past has pushed to shake up AOL and Office Depot, now owns 5.7 percent of Smithfield, making it the second-largest shareholder after giant money manager BlackRock.
