<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
SCHEDULE TO
(RULE 14d-100)
Tender Offer Statement Pursuant to Section 14(d)(1) or 13(e)(1) of
the Securities Exchange Act of 1934
(AMENDMENT NO. 8)
IBP, INC.
(Name of Subject Company)
LASSO ACQUISITION CORPORATION
TYSON FOODS, INC.
(Name of Filing Persons-Offeror)
COMMON STOCK, PAR VALUE $.05 PER SHARE
(Title of Class of Securities)
_______________
449223106
(Cusip Number of Class of Securities)
LES BALEDGE
TYSON FOODS, INC.
2210 West Oakland Drive
Springdale, Arkansas 72762
Telephone: (501) 290-4000
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Filing Persons)
Copies to:
Mel M. Immergut
Lawrence Lederman
Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, New York 10005
Telephone: (212) 530-5732
CALCULATION OF FILING FEE
Transaction Amount of
valuation* filing fee
$1,570,612,320 $314,122.47
<PAGE>
*Estimated for purposes of calculating the amount of the filing fee only.
The amount assumes the purchase of a total of 52,353,744 shares of the
outstanding common stock, par value $0.05 per share, of IBP, inc., at a
price per Share of $30.00 in cash. Such number of Shares, together with the
574,200 shares owned by Tyson Foods, Inc., represents approximately 50.1%
of the 105,644,598 Shares of IBP, inc. outstanding as of December 28, 2000
(as represented by IBP, inc. in the Agreement and Plan of Merger, dated
January 1, 2001, by and between Tyson Foods, Inc., Lasso Acquisition
Corporation, and IBP, inc.).
[X]Check box if any part of the fee is offset as provided by Rule 0-
11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: 314,122.47 Filing Party: Tyson Foods, Inc.
(Offeror Parent) and Lasso
Acquisition Corporation
Form or Registration No.: Schedule TO Date Filed: December 12, 2000,
December 29, 2000 and
January 3, 2001
[_] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which
the statement relates:
[X]third-party tender offer subject to Rule 14d-1.
[_]issuer tender offer subject to Rule 13e-4.
[_]going-private transaction subject to Rule 13e-3.
[_]amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer. [_]
AMENDMENT NO. 8 TO TENDER OFFER STATEMENT
This Amendment No. 8 to the Tender Offer Statement on Schedule TO
as the same may have been amended from time to time (as amended hereby, the
"Schedule TO") relates to the offer by Lasso Acquisition Corporation, a
Delaware corporation ("Purchaser") and a wholly-owned subsidiary of Tyson
Foods, Inc. ("Tyson") to purchase the number of outstanding shares of
common stock, par value $.05 per share (the "Shares"), of IBP, inc., a
Delaware corporation ("Company"), which, together with the Shares owned by
Tyson, constitutes 50.1% of the outstanding Shares at $30.00 per Share, net
to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated December 12, 2000 (as amended, the
"Offer to Purchase"), and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively
constitute the "Offer"). Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Offer to Purchase.
The item numbers and responses thereto below are in accordance with the
requirements of Schedule TO.
<PAGE>
On January 1, 2001, Tyson issued a press release announcing that
it had signed a definitive merger agreement with the Company pursuant to
which Tyson increased its Offer to acquire the Company to $30.00 per share.
Tyson also announced that it will commence promptly an exchange offer for
all Shares not purchased in this Offer (the "Exchange Offer"). In the
Exchange Offer, Tyson will offer to exchange, for each outstanding Share
not owned by Tyson, a number of shares of Tyson Class A Common Stock having
a value of $30.00, so long as the average per share price of Tyson Class A
Common Stock during the fifteen trading day period ending on the second
trading day before the expiration date of the Exchange Offer is at least
$12.60 and no more than $15.40. This $30.00 value is subject to change if
the average per share price of Tyson Class A Common Stock is not in that
range and the value you will receive will be proportionately changed.
The Offer, proration period and withdrawal rights will expire at
12:00 midnight, New York City time, on Tuesday, January 16, 2001, unless
the Offer is extended.
Item 12. Exhibits.
(a)(1) Offer to Purchase dated December 12, 2000.*
(a)(2) Letter of Transmittal (including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9).*
(a)(3) Notice of Guaranteed Delivery.*
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.*
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.*
(a)(6) Form of summary advertisement dated December 12, 2000.*
(a)(7) Press Release issued by Tyson dated December 11, 2000.*
(a)(8) Tyson Conference call dated December 12, 2000.*
(a)(9) Press Release issued by Tyson dated December 12, 2000.*
(a)(10) Tyson Presentation delivered December 14, 2000.*
(a)(11) Press Release issued by Tyson dated December 19, 2000.*
(a)(12) Tyson Presentation delivered December 19, 2000.*
(a)(13) Press Release issued by Tyson dated December 28, 2000.*
(a)(14) Press Release issued by Tyson dated January 1, 2001.*
(a)(15) Tyson Conference call dated January 2, 2001.
(d)(1) Confidentiality Agreement between Parent and the Company dated
December 4, 2000.*
(d)(2) Proposed form of Merger Agreement to be entered into by and among
Tyson, Purchaser and the Company.*
(d)(3) Revised Merger Agreement, executed by Tyson.*
*Previously filed.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and
correct.
TYSON FOODS, INC.
/s/ LES BALEDGE
--------------------------
(Signature)
Les Baledge, Executive Vice
President and General Counsel
------------------------------
(Name and Title)
January 3, 2001
------------------------------
(Date)
LASSO ACQUISITION CORPORATION
/s/ LES BALEDGE
------------------------------
(Signature)
Les Baledge, Executive Vice President
-------------------------------------
(Name and Title)
January 3, 2001
-------------------------------------
(Date)
<PAGE>
EXHIBIT INDEX
Exhibit No.
-----------
(a)(1) Offer to Purchase dated December 12, 2000.*
(a)(2) Letter of Transmittal (including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9).*
(a)(3) Notice of Guaranteed Delivery.*
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.*
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.*
(a)(6) Form of summary advertisement dated December 12, 2000.*
(a)(7) Press Release issued by Tyson dated December 11, 2000.*
(a)(8) Tyson Conference call dated December 12, 2000.*
(a)(9) Press Release issued by Tyson dated December 12, 2000.*
(a)(10) Tyson Presentation delivered December 14, 2000.*
(a)(11) Press Release issued by Tyson dated December 19, 2000.*
(a)(12) Tyson Presentation delivered December 19, 2000.*
(a)(13) Press Release issued by Tyson dated December 28, 2000.*
(a)(14) Press Release issued by Tyson dated January 1, 2001.*
(a)(15) Tyson Conference call dated January 2, 2001.
(d)(1) Confidentiality Agreement between Parent and the Company dated
December 4, 2000.*
(d)(2) Proposed form of Merger Agreement to be entered into by and among
Tyson, Purchaser and the Company.*
(d)(3) Revised Merger Agreement, executed by Tyson.*
*Previously filed.
Exhibit (a)(15)
Media Contact: Ed Nicholson
(501) 290-4591
Investor Contact: Louis Gottsponer
(501) 290-4826
TYSON FOODS
January 2, 2001
10:00 a.m. CST
(Conference in progress)
Moderator Thank you for standing by. Welcome to the Tyson Foods'
conference call. At this time all participants are in a
listen-only mode. Later, we will conduct a question and
answer session. Instructions will be given at that time.
If you should require assistance during the call, please
depress zero, then *. As a reminder, this conference is
being recorded.
I would now like to turn the conference over to our host,
Director of Investor Relations, Mr. Louis Gottsponer.
Please go ahead.
<PAGE>
L. Gottsponer Thank you. Well good morning everyone, and thank you for
joining us this morning to talk about our agreement to
acquire IBP. With me this morning are John Tyson, our
Chairman, President and CEO, Greg Lee, our Chief Operating
Officer, and Steve Hankins, our Chief Financial Officer. In
just a few minutes, we're going to hear some prepared
remarks from both John and Steven, and then we'll take
questions.
Before we get started though, I want to remind you that some
of the things we are going to talk about today are going to
be forward-looking statements. That means those statements
are subject to risks and uncertainties which could cause
actual results to differ materially. So, I want to
encourage you to review that lists of those risks and
uncertainties in yesterday's press release. So, with that
I'll turn it over to John Tyson.
J. Tyson Well, good morning. I can tell you there's a group of folks
here at Tyson Foods that are very excited about the
opportunity to work with the great management team up there
at IBP, and the things they put in place. Very simply, when
we started to look at the IBP opportunity, the vision that
we saw here at Tyson Foods was the opportunity to create the
largest marketer of beef, pork and chicken, to take the
strengths that we've demonstrated in the chicken business,
match it with the strengths that the folks at IBP have
demonstrated in the beef and pork industry and put them
together.
Sometimes in your business life you come to a point-in-time
opportunity, to look at a unique opportunity, and that is
the opportunity of the Tyson/IBP combination. You know, at
Tyson we have the ability to develop innovative and branded
food products, and market them successfully through all the
distribution channels that are out there. IBP is the
historical leader and innovator in the beef and pork sector.
You put those two together, and you can see a lot of the
opportunities downstream to drive growth, to drive earnings-
per-share growth, and to drive cash flow growth. We are
uniquely positioned to capture the significant potential
that's in the marketplace today through each of the channels
we distribute through. We're in the food service channel.
We're in the retail channel. We're in the club score
channels. We have strong penetration of all of those
channels, with branded convenience items. The things that
IBP has put in place, we can help accelerate those moves
into those channels.
<PAGE>
Our food service leadership gives us the chance to then take
advantage of the IBP Food Brands Unit. They have put
together some products that we can use, and that we can take
to the food service market. There are two strong management
teams, between our management team and between the
management team at IBP. There will be and there are
substantial synergies. We have tried to look at our
synergies in a conservative manner. Each time we visit and
talk, we discover more opportunities and synergies. We will
use those synergies: one, to pay down debt, and two to grow
our business.
This deal is significantly accretive to earnings per share,
and it gives us an attractive use of free cash flow on a go
forward basis. In the end, you've got to look at why Tyson
was maybe the preferred choice for the folks at IBP. I
think it comes down to our branded marketing experience that
Tyson has, the strategic fit of food brands in the Tyson's
Food Service Group. The complimentary management teams that
will allow us to retain focus on the individual segments,
which means basically operations and managements will
basically be uninterrupted.
We will have the ability to take advantage of our strengths,
to service the consolidating customer marketplace. Five of
the top retailers have a little bit less than 50% of that
market share. There are a limited number of players in the
Club Store arena, and in the Food Service arena there is
consolidation going on there. We can take and match our
efficiencies and our service to meet a changing landscape.
I think the other thing is, is that the transaction with
Tyson and IBP ensures that this transaction will come to a
close. A lot of us out there, when we get into situations
of uncertainty, it becomes uncomfortable. For the folks at
IBP this brings closure, and this brings certainty to it.
They can do what they do best, they can go out there and
keep growing their business and keep growing their market
share with what they're doing and branding the beef and pork
segment.
Then we can learn and take opportunity of the things that
they bring to the table. They have a tremendous
refrigerated distribution network. We at Tyson Foods know
we need to be in that segment. We can now go into their
distribution network and we can put a range of Tyson
products and use their plants, and use their people, and use
their distribution network to grow a segment of the business
that we want to grow in. They in turn, can use some of our
networks to grow their business, and I truly believe in the
end, you've got a chance of putting one plus one, not to get
three, but maybe get a four or five on a go-forward basis.
I'm going to let Steve Hankins, our Chief Financial Officer,
speak to you on the offer and the next steps that we have in
place. Then from there, I think we'll move into question
and answers, and go from there, Steve.
<PAGE>
S. Hankins Thank you John, good morning. The offer, of course, is $30
per share of IBP stock. It remains a 50% cash, 50% stock
offer, transaction value of $4.7 billion, including the
assumption of approximately $1.5 billion in debt.
A bit about the next steps that will take place. Our cash
tender that is on-going, is being amended today. We plan on
closing that cash tender on January 16th, of course this is
subject to HSR approval. If HSR approval were to occur
after the 16th, we would close the cash tender shortly after
that approval. We will be commencing our exchange offer.
We expect that to close by mid-February. So, it is our
expectation that by Valentine's Day, all the shareholders of
IBP should have both their cash and their stock and that the
transaction will be closed.
Again, the deal is very accretive, 15% plus on gap earnings
per share the first full year, and over 20% in cash earnings
per share over that first full year.
A bit about our projections. We've taken a very
conservative view. Again, I would refer you to the base
case that was provided to the management proxy related to
the buy-out proposal that has since been canceled. Also,
would note that that information in the proxy is a more
conservative case than many of the street estimates that are
in place today from the street analysts. With our due
diligence process, we have also reviewed with management
both their fourth quarter anticipated performance, which I
know has been commented on publicly. We've discussed the
effect of both the cattle cycle and the pork cycle, and on-
goings in the pork industry. On their performance, I want
you to know, we've taken that into account in our models.
As I say we've taken a conservative approach looking into
the future and have based our accretive statement on those
conservative approaches.
Some information that will be helpful, as different analysts
work on their models, combined amortization expense for the
two companies should be in the neighborhood of $100 million
annually, for the first year. Combined depreciation expense
will be in the neighborhood of $425 million annually, during
that first year. We expect annual capital expenditures to
be in a range of between $550 and $600 million. New debt,
interest rates, as stated before, we expect to be in a range
between 7.75 and 8.25 on new debt. The interest rate for the
combined company, based on the current interest rate
environment, we are estimating at approximately 7.50%.
While I have this opportunity, I want to comment just a bit
on the outlook for Tyson. For our first quarter of fiscal
`02, which ended December 30th, we had previously announced
an earnings per share range of between $0.08 and $0.12. Our
current expectations are that we will be at the top-end of
that range when we announced earnings. Our outlook for the
second quarter of fiscal '02 remains unchanged from that
stated before. We still expect an EPS range of between
$0.08 and $0.12 per share.
<PAGE>
With that I will open it up for questions.
Moderator Ladies and gentlemen, one moment please for the first
question.
Our first question comes from the line of Christina Brodrick
at the American Stock Exchange. Please go ahead.
J. Schuster Hello, my name if Jeff Schuster. I have a question about
the way the stock and cash portion is going to be
distributed. Would the shareholder of IBP stock get to
choose whether they want stock and cash or cash and stock?
How would the breakdown be?
S. Hankins Well, the shareholder of IBP has an option. They certainly
can tender, as part of the cash tender process, or they
could wait and tender as part of the stock exchange process.
Of course, within the cash tender process, if more than 50%
of the shares are tendered then there will be a prorated
payment of the cash, up to the point of 50% of cash in the
total transaction.
J. Schuster Okay, thank you.
Moderator There are no further questions in queue, please continue.
J. Tyson Well, if there are no further questions from the individuals
out there in the marketplace, the folks at Tyson foods are
comfortable with what has been shared with you today. It's
a great opportunity, it's a unique opportunity. It was the
best deal for the IBP shareholders, and the opportunity for
these two great companies to come together and to go forward
to service the marketplace is something that is a wonderful,
wonderful opportunity.
For the folks that are listening out there, that are part of
the IBP team, I want to say welcome. I look forward to not
only working with you, but I look forward to learning from
you, and together we will have some great opportunities to
go out and service our customers, grow our business, be the
leaders that we are, take the innovations of branded
products, the innovations of convenience products, the
products that meet our customer's changing needs, and then
from there we will do what our shareholder's have asked us
to do, is to grow our business and to grow our earnings per
share. So, with that, Mike, are you still there, operator?
Moderator Yes sir, I'm here.
S. Hankins Do we have any other questions at this time?
Moderator It will be just one moment, for the first question.
L. Gottsponer Mike, this is Louis Gottsponer again. I know we have some
people trying to get to the Q&A line because they're calling
back into here, indicating that they're not able to get
through. So, let's give them just a minute and see if we
can get this thing worked out from a technical standpoint.
<PAGE>
Moderator Yes, one moment. We do have a question from the line of
Erica Long at J.P. Morgan. Miss Long, your line is open.
J. Tyson Hi, Erica. How are you?
J. Tyson Hello.
J. Tyson It didn't come through, Louis.
L. Gottsponer Mike, we didn't get the question from Erica.
E. Long Can you hear me now?
J. Tyson Yes, Erica, there you are. How are you?
E. Long Good, thank you. How are you?
J. Tyson Well, technology sometimes throws us a curve ball.
E. Long Absolutely. I just have a couple questions. The first one
is, do you have any firm commitments from team members of
the IBP management team that they will stay on with the
combined entity? How is that structured?
J. Tyson The structure of the commitment to stay with us, or the
structure of the on-going organization?
E. Long The structure for them to stay with you, and then if you'd
like to discuss the structure of the on-going organization,
that would be helpful too.
J. Tyson I have had numerous conversations with both Bob and Dick,
and I have assurances from Bob, and I have assurances from
Dick that we are going to work together, and they get as
excited as I do about the potential combination.
E. Long Will there be anything contractual or in writing for a
certain period of time, do you think?
J. Tyson Those technical details are being worked on as we speak, and
I would hope that they come to conclusion by the end of this
week.
E. Long Great. With regards to some financial numbers, perhaps
Steve could help me out with this. Could you tell us what
you're estimated debt to EBIT DA ratio would be following
the closure of this transaction?
S. Hankins Estimated debt to EBIT DA. Give me just a minute on that
Erica.
E. Long Okay, and maybe I can just ask a follow-up then, while you
look for that. Your earnings view, would it be using the
assumptions listed in that management proxy, or is it more
conservative than that?
<PAGE>
S. Hankins I would say Erica, that's a good place to start. We have
applied some knowledge beyond that, based on our due-
diligence, and have been perhaps a bit more conservative
than that.
E. Long Finally, can you go into a little bit more detail on the
refrigerated distribution opportunities?
J. Tyson Erica, Johnny here and Greg may pitch in. One of the things
that we've recognized at Tyson Foods is that's a part of the
arena that we don't participate in very well. We get fresh
chicken out there, and we do that greatly. but when you go
to the refrigerated meats, be it at the deli level, be it at
the retail level, be it at the food service level, we don't
have, one, don't have plans to produce those products. We
have tried to be in the refrigerated distribution business a
little bit, where we ask somebody to co-pack our brand and
do that, but those are some hurdles to do. I'll let Greg
expand on the opportunity that he sees there.
G. Lee Let me just make two additional comments. I think Johnny
has framed it well. Let's back up to fresh for just a
moment. Erica as you know, we're the largest player in the
pre-package, tray-pack chicken industry. Our primary modus
operandi of distribution there is plant directs. We ship
from the plant to a retailers warehouse or to a third party
retail distributor's warehouse. We also take some of the
products that we do campaign, and let's say are fully
prepared refrigerated products. The easiest example would
be our roasted chicken. Often times what we do there is we
actually distribute that roasted chicken from our
manufacturing plant to our chill pack plants which are
disbursed across about 60% of the country, then they in turn
ride with the tray-pack poultry to the warehouse. What we
foresee in the future is that since IBP has a significant
array of fully prepared refrigerated products, as well as
have built capabilities in the throws of launching even more
fully prepared center of the plate entree meat items, we
believe that we can take that refrigerated distribution
system that they have in place and marry some of our fully
prepared refrigerated poultry items there and really take
them a better economic model to distribute that products,
plus just make them easier for the retail customer to get
and give us a better chance to enhance our sales.
E. Long Would it be direct store delivery then?
G. Lee No, we don't anticipate that at this juncture. I guess you
could envision in the future that we might be in an
opportunity to give consideration for that, but I think that
would be an incremental step, if it made sense and if it
made financial and service sense to the customer in the
future. I might also, just quickly let me say this about
fresh. IBP is set out and has constructed and is using four
forward distribution warehouses for fresh meats.
<PAGE>
I can envision in the future that we might well have a
system whereby you took case-ready beef and pork and case-
ready raw chicken product and potentially marry them, and
ship them to the retailer. You could even perhaps reach
beyond that and say that at some point you might combine
both fully prepared refrigerated and fresh and have a real
easy situation for your retail customer, or to the extent it
makes sense for a food service application the same way.
So, we think it's really going to be a benefit to us.
E. Long At this point, nobody like at ConAgra who also has the
capability of offering all three proteins, distributes in
that fashion.
G. Less I'm not a ware of anybody that is consolidating exactly in
the manner that we just discussed.
E. Long Great. That's terrific.
S. Hankins Erica, in regards to your debt to EBIT DA question, in
making that calculation, you should use a debt level of
approximately $4.8 billion.
E. Long Okay. Great, thank you very much.
S. Hankins Thank you.
J. Tyson Thank you, Erica.
L. Gottsponer Mike, are you still there? Is the operator still on the
line?
Moderator Yes, sir, I'm here. I'm sorry. Mr. Nelson, your line is
open.
D. Nelson Thank you. Congratulations.
L. Gottsponer Good morning, Dave.
J. Tyson Good morning, Dave.
D. Nelson First of all, on capital expenditures, you talked about $550
to $600 million, I think before Tyson was looking at like
$250, IBP I think in the proxy was close to $500, what's the
nature of the difference between the $550 to $600 and the
two non-combined numbers?
S. Hankins Dave, I think the Tyson number is still in that range,
between $200 to $250.
D. Nelson Yes.
J. Tyson I believe that the IBP number as we have talked to Bob and
Dick, some of that money has already been spent in this
year.
D. Nelson Yes.
<PAGE>
J. Tyson So, it's just a function of where the flows were, and as
they anticipate the management of their cap ex on a go-
forward basis.
D. Nelson So, that's going to get a lot better.
J. Tyson Yes.
D. Nelson All right. Food brands, any potential changes in who or how
that's going to be run, given Tyson's capabilities?
J. Tyson I think that's the opportunity that I'll get to visit with
Dick and Bob and his team, and we'll discuss about those
opportunities, and Greg and the folks that run our food
service group. We get excited about the potential, and of
course we all have got top-line thoughts, but we'll need to
visit with the food brands management team, they have some
things in place in some of the things they were getting
ready to do. We'll have to visit with them about our
strengths and some of the things we see. Out of that, in
the next 90 to 180 days, we can see where we'll take
advantage of each other's strengths to make the right
decisions and do it very methodically, but still very
efficiently.
D. Nelson Okay. IBP has been pursuing forward warehousing, that's in
fact one of the places where they've been spending a lot of
money, I guess $110 million. Do you see any opportunities
there for Tyson to take advantage of?
G. Lee Dave, this is Greg Lee. Yes, sir, we do. In fact, maybe
the answer to Erica's question wasn't one that could be
heard by everybody, but let's talk a little bit about that.
The Forward Warehousing, the refrigerator program they put
in place, they put four warehouses and that was to try to
bring some economy and service improvement to their basic
fresh meat business. We think that that is a well thought
out program and we think it's one that can be extendable,
that could move over into case-ready products, and
ultimately maybe could move over to a combination of case
ready as well as some fully prepared refrigerated products.
But we think that is a good program and one that we could
learn from potentially on our basic fresh chicken
distribution.
J. Tyson And Dave, you speak of warehousing, the folks at IBP are
getting ready to bring on a 400,000 square foot plus
facility in Aletha, Kansas that is going to service their
food branch group, which is a pick and service type of
facility. We've got two of those in our systems. We
understand how to do those type of operations and I think
that's another opportunity for us to work with the idea that
they have in place and accelerate the learning curve,
because they're headed in the right direction and maybe some
of the mistakes we made we can help them eliminate some of
those and build off that distribution network that they're
increasing.
<PAGE>
G. Lee We think we have a very, very strong warehouse management
system that could perhaps come into play in this new
warehouse. And I might also add, this new warehouse has
John has referred to it has extensive capabilities in
refrigerated. So it is both a refrigerated and a frozen
distribution point, so we think there's some good
synergistic opportunity there.
D. Nelson If I could ask one last question, I suspect you've been in
contact with major retail customers since all this came out.
What's been the feedback from a Safeway, a Kroger, a Wal-
mart to your potential acquisition of IBP?
G. Lee I think from our view it's been positive in this regard.
They recognize that we're a company that has tried very hard
to take large key retailers and try to work directly with
them. Everybody's got a different kind of modus operandi
that they operate about and we've been all about trying to
align ourselves with our customers and put our sales,
marketing and support programs in alignment with that
retailers' direction. We think that we enjoy a good
reputation with the retail community and we can take
advantage of that. They also are very pleased with the
progress that IBP has made to date on case ready. Feel that
it is a very viable product and a very viable operating
principle and that we can take advantage of it.
I might also say that we've had lots of conversations with
key people in the food service arena. As I think you well
know, IBP, both from a basic fresh meats perspective as well
as through food brands has extensive amount of volume that
travels through the major food service community, both at
the street distributor, the SYSCO's of the world, as well as
the chain restaurant people where they make a lot of
proprietary products for the food service industry, that's
certainly two key focuses of our business. We enjoy good
relationships there and the playback's been very favorable.
D. Nelson You haven't heard any market concentration issues from them?
G. Lee No sir, we have not.
D. Nelson Fantastic. Thank you.
Moderator Our next question comes from Christine McCracken at Midwest
Research.
C. McCracken Hi. Congratulations. Wondering if you have any comment on
the anti-trust proceedings, what you're doing to kind of
satisfy the concerns or if you are not able to comment
possibly in more detail and when we could expect some kind
of resolution?
<PAGE>
J. Tyson I would think that based on what we've heard from
Washington, we're in the first stage of sending back their
first request. I'll answer it in two parts. One is, our
request went into Washington right in the middle of the
holiday season and right in the middle of a transition
between administrations. There is no doubt that that slowed
it down some.
Secondly, based on the preliminary reads of the second
request, it's more a [perfunctory] type request with a very,
very narrow focus to understanding our live swine business,
and understanding where our animals move to which markets.
We have started to fill out that information. Our live
animals, we have two markets for the product that comes out
of our live swine group, the finished animals are under
contract to Cargil for two years. We do sell some feeder
pigs up into the Midwest, but once we sell the feeder pig,
the farmer is at his discretion to sell to whatever packer
he wants to, and that's basically where the focus is.
C. McCracken So it doesn't have anything to do with total percentage of
the meat case or ..
J. Tyson None at all.
C. McCracken Great. Also wanted to ask, regarding synergies, you'd
mentioned that there were considerable synergies, have you
changed your assumptions in that regard at all relative to
the first conference call?
S. Hankins No, we haven't changed our assumptions to any measurable
extent. We continue to talk about $100 million and a half
of that achievable in the first year. I will say that
through the due diligence process and discussions with
management, we've become more optimistic about synergies.
The $100 million was chosen out of a range, in somewhat of a
low point of a range that we've been looking at, but that's
all we're prepared to still talk about at this point. But
we're very optimistic about the synergy opportunities we
see.
C. McCracken One final question. You've spent a lot of time and money
developing the Tyson brand. Obviously these new initiatives
at IBP to develop case ready in the Thomas C. Wilson line
are in the preliminary stages of being launched. Is there
any thought as to whether or not you'll continue to pursue
the Thomas C. Wilson line, if you'll try to leverage your
Tyson brand that is already well established into beef and
pork? Any comment?
J. Tyson I think the think you have to compliment the IBP folks on
first of all is that they took the steps to move from just
USDA beef or USDA pork into establishing a brand. And the
Thomas C. Wilson brand is a solid brand that basically
captures the heritage of the IBP and the history of IBP. At
this time, I see no reason to change the course because that
is a good brand, it's a developing brand out there in the
marketplace.
<PAGE>
From a market perspective, I could guess we like the
aggressive plans that IBP has in place and I would encourage
them to stay the course and I think most folks who know me,
go a little bit faster.
C. McCracken So no plans to change the progress there?
J. Tyson No.
C. McCracken Fantastic. Congratulations again.
Moderator Our next question comes from Jeff Kanter, Prudential
Securities.
J. Kanter Any intention to address the collar, being that your stock
is below the minimum point?
J. Tyson No, we have a deal. It's only in the first hour of trading,
Jeff. I think all of you that have watched enough deals go
across Wall Street, be it food deals, be it other general
business deals, understand the dynamics that happen in the
first couple of hours. I would assume that as people visit
with us and as people visit with the IBP, they'll start to
really understand the unique value of this opportunity and
they'll understand the value of our stock today and realize
that they've got a great potential and a great opportunity
to participate in a wonderful combined company on a go-
forward basis.
J. Kanter Second question, you're assuming $1.5 billion in debt. I
thought the number originally was $1.4 billion. That extra
$100 million came from what?
S. Hankins Jeff, there's always a rounding involved in those statements
and we've done further due diligence and work with the
management team there at IBP, and so we made a slight
rounding change in the number or slight change in our view
to the number and just for rounding purposes rounded it to
$1.5 billion now.
J. Tyson And I think when you go back to it, on a previous question
on cap ex, some of the cap ex was pushed back into the
fourth quarter and spent ahead and that effected the number
some.
J. Kanter That's what I figured. As far as the accretion, I see the
numbers that's in your press release, but most of us are
concerned about year two and three when cattle fundamentals
go the other way. Can you address what you expect as far as
accretion in looking out over the next 12 months?
<PAGE>
S. Hankins The accretion numbers we've given, Jeff, are really kind of
a view to the first full year of operations. We understand
the effect of the cattle cycle and what's going on with pork
and the view to the numbers, and as I've said, we've been
conservative over the next couple of years. As you get out
beyond that one-year point, you actually see the accretion
percentages pick up in our models. So what we've given you
from the first year basis are actually the low point in the
accretion in all the models that we ran.
J. Kanter Okay, so even if the cattle supplies get significantly
lower, you still expect an acceleration of the accretion
going into year two?
S. Hankins Yes, we've factored in a view certainly to cattle supplies
over the next couple of years in the way we've ran our
models.
J. Tyson And when Steve ran his models, Jeff, I mean he took the last
10 or 15 year history of IBP and they've always managed to
make good money as the cattle cycle moves. And so we took
that historical perspective and used that in our judgment of
putting the models together on a go forward basis.
J. Kanter Steve, can you just review the timeline one more time for
us? January 16th is when the cash tender offer expires, but
the consideration for the stock part begins today. Is that
correct?
S. Hankins The consideration for the stock, the exchange tender will be
put in place shortly. That will take just a few days to get
through the paperwork and such to have that out there.
We're factoring that timeframe in and saying that in that
second week in February the exchange tender from stock would
also close. So our expectation is that by mid-February the
cash tender certainly will have closed. The date on that
remains January 16th. It will close on that day or shortly
following Hart-Scott. The exchange tender will be closed by
the end of that second week in February, based on the
timeframe that we have laid out.
J. Kanter So essentially if you don't get Hart-Scott, the cash tender
offer will stay open until you get HSR clearance?
S. Hankins That is correct. And just in a very short period of time,
could be as little as two or three days following Hart-
Scott, the cash tender would go ahead and close.
J. Kanter Thank you very much.
Moderator Our next question comes from Jane Meery from Salomon Smith
Barney.
J. Meery I just want to follow up on a statement that you just made
to Jeff. You said that no matter how the cattle cycle
moves, IBP always manages to make good money. I seem to
remember a year where they made a penny. Did I
misunderstand what you were saying?
<PAGE>
J. Tyson I don't understand your question. You're trying to pick one
year out of 15. I think it comes back to the quality of
management at IBP and I appreciate the question. It shows
that as things move and change, these folks are able to
manage their business and manage their cash. The other
thing that they've done is that they've distanced themselves
from the commodity market cycle with what they're doing in
case ready meats and what they're doing in prepared meats
and what they're doing in convenience items. So they have
in effect distanced themselves.
If you'll go to their margins for the last two or three
years, you can see the steps that they have put in place to
even move themselves from the historical perspective. I
made that statement in a context to how we viewed our models
and I believe your question was taken out of context to how
I viewed our models.
S. Hankins Jane, I think if you look back over the past ten years, and
I don't have that laying directly in front of me, but you
almost referenced back to the last point in the cattle
cycle, which is an eight to ten year cycle, as you look at
today and look going forward, you certainly see a different
IBP.
J. Meery I'm aware of how the profile of IBP has changed
dramatically, both through more exposure to pork and then
the food brand side of the business. But the question that
Jeff had asked was I think specifically about deteriorating
cattle fundamentals and I guess I thought I heard you said
they make good money. I think you were saying they make
really good money in cattle no matter what happens in the
cattle cycle, or so I misunderstood you.
Following up on the HSR, are you under the impression at all
that there might be any state senators or attorney's
generals who kind of have something to prove that they may
try and delay this through senate hearings come February and
March?
J. Tyson No. We have had no indication. I think if you look at the
public comments from the farmer groups out there, they have
basically viewed their pleasure with the Tyson/IBP
combination, because that means there's more markets
available, there are more places for the farmers to sell
their pork and to sell their beef out there in the
marketplace versus a Tyson/Smithfield combination. And the
farmer groups that we've talked to and shared with are
comfortable with it. Not only from that perspective, but
they know what we've done with the poultry industry in
trying to sell more product out there with a branded
concept.
J. Meery Okay. But this deal is not immune from, again, I don't
think that there's a basis to stop the deal, but as you
know, this is something that could become fairly politicized
and you don't see that as a risk at all to Valentine's Day?
J. Tyson No, we do not.
<PAGE>
J. Meery Thank you.
Moderator Our next question comes from Mike Rogers.
M. Rogers Good morning. Not to belabor the point, but what would you
tell consumers this morning, and even producers for that
matter, and I know we just talked about farmers and the
response you've had from ag groups around the country,
gentlemen, but what would you tell consumers this morning
who might have concerns over concentration issues on this
acquisition?
S. Hankins First of all, I think we're overplaying that. This doesn't
change concentration at all. Tyson has approximately 25% of
the chicken business. You know what the percentages are on
the red meat. I think what I would be telling consumers is
that this is a great day because we're going to have a high
level of service, a high level of quality, a lot of effort
towards developing convenience foods for the future, and
there's certainly no reason to believe that there's any
economic consequence that's not favorable.
M. Rogers Gentlemen, have you talked, as I say with farm groups, we've
had concern and heard from groups in Illinois and Indiana
this morning asking how this might effect producers who
currently have working agreements and arrangements with IBP.
Is it just too early to say?
J. Tyson Mike, I guess I don't know which groups you've talked to,
but as we've stated, we have no plans - and as I've stated
in public comments, and this is John Tyson here - in my
business lifetime there are no plans to vertically integrate
the IBP group. We want to help the farmers out there sell
more pork and sell more beef, take the things that we have
done in the poultry industry in terms of creating
convenience items, creating products that fit the changing
customer marketplace out there, and then take those products
out there and put them in the grocery store so that farmer
out there knows that the pork that he grows or the cattle
that he grows is being put in a form that the end customer
wants it, be it a fully cooked pork loin or fully cooked
beef type item, and those are the things we're going to
bring to the marketplace. Our job is just to sell more beef
and pork. If we sell more beef and pork, we're going to
need more cattle and hogs.
Moderator Our next question comes from John McMillan.
<PAGE>
J. McMillan Listen, this is a good deal for IBP shareholders, but I
still have some question as to how good of a deal it is for
Tyson shareholders. This stock is getting annihilated
today, and more so than other deals that are announced,
John. I've actually seen deals where they're announced and
the acquiring stock goes up. Clearly, the percentage of
them go down, but the magnitude here is a little bit high.
In the proxy there were two separate earnings forecasts.
One was as low as $1.90. Your question in terms of which
earnings forecast you're using, as far as I remember,
management had an earnings forecast in the $2.40 range and
there was one down in the $1.90 range, if my numbers are
right. You're using the higher end, is that right? Or
lower then the higher end but not as low as the $1.90 that
was used?
S. Hankins I think the word "conservative" is the operative word in the
$1.90 and then take a conservative view.
J. McMillan That's not answering, are you using a number as low as $1.90
for that first full year? Because that was used in the
proxy by the Rawhide Group.
S. Hankins Yes. We're using the $1.90.
S. Hankins The lower estimate, John, is the one we worked off as the
base case, yes.
J. McMillan And that gets you the 30% accretion with the cost savings?
S. Hankins The numbers in the press release in the first full year are
over 15% on a GAAP basis and well over 20% on a cash basis.
But yes, we've used the most conservative view in that proxy
and then augmented it with our view from the processes we've
gone through.
J. Tyson And John, in appreciation to your question about the Tyson
shareholders, our responsibility is to figure out what our
company's going to look like not only in the six month
window, but what our company's going to look like year two,
year three, year five from now. And occasionally in your
business life you get an opportunity to look at a unique
opportunity that, you know, I wasn't worried about our stock
price going up in the short-term, six months, twelve months,
because the fundamentals of our poultry business are in good
shape, the fundamentals of how our people are running our
business is in good shape. But three to four to five years
from now, John, you're going to be asking the question about
what are you going to do next, what is Tyson Foods going to
be doing next to grow their business. And we were in a
place and in an opportunity to put two great companies
together at a unique point in time history that when you
look at years three, four and five, and you appreciate the
value of the combined companies, I think that's the
appreciation as we view the deal on a go-forward basis, not
looking backwards.
<PAGE>
J. McMillan Can I just ask Greg, in terms of the development of the
Thomas Wilson brand in case ready, is that still the game
plan or do you think the Tyson brand could be used in some
aspects beyond chicken into the beef and pork area?
G. Lee I'm only going to say, John, we're going to be very, very
careful about that. They started down a good road. The
Thomas C. Wilson is gaining good reception in the
marketplaces where it's being campaigned and I think we
would want to be very, very cautious about making any
changes. But our ears and eyes will be opened to what makes
sense in the long-term.
J. McMillan Just to follow up what Erica said in terms of a bond in the
management team, you basically don't have any set
agreements. The extra $100 million in debt was not the lock
in Bond/Peterson, I hope.
J. Tyson I don't believe so, but I'll tell you what, Bob Peterson's a
wonderful guy and Dick Bond's a wonderful guy and I'm
looking forward to both Bob and Dick teaching me the beef
and pork industry, us sharing with their great folks on how
to grow these great businesses together.
J. McMillan Well they're certainly solid executives and things have
worked out for the benefit of IBP shareholders, perhaps by
accident, but they've worked out. Have a good day.
Moderator Our next question comes from Marcella Fava of Alpine
Associates.
M. Fava I have a couple of mechanical questions. The tender offer I
know is slated to expire January 16th. But technically, I
think if you get hung up on HSR at all it could extend it to
February. Is there any requirement that the tender offer
close before the exchange offer? Or theoretically, could
they both be closing around the same time?
S. Hankins There is no requirement there, as you referenced.
Theoretically, they both could be closing at the same time.
Our view to the HSR process is that should be wrapped up
certainly by the end of January. So, we expect hopefully by
the 16th but certainly by the end of January that we'll have
HSR wrapped up.
M. Fava I wish you well on that. Second question is the trading
range for the exchange offer. Is it the same as it was
earlier?
S. Hankins Yes.
M. Fava Thank you.
Moderator Our next question comes from Aaron Hara at Spear Leeds
Kellogg.
<PAGE>
G. Gulani This is Greg Gulani. With the exchange offer, could you
describe the pricing period and how it works - number of
days and whether it would be using the Tyson closing price
or volume weighted average price?
L. Baledge This is Les Baledge. I'm General Counsel at Tyson Foods.
What we have is a 15 business day pricing period prior to
the close.
G. Gulani And it's based on Tyson's closing price?
L. Baledge Yes.
G. Gulani I know you answered the question indirectly earlier, but
just for clarification, does the merger agreement contain
any provisions pertaining to Tyson's stock price, if its
stock trades outside the collar?
L. Baledge The collar is established at the original level and has not
been changed.
G. Gulani And there's no rights given to IBP if it trades outside the
collar?
L. Baledge That is correct.
G. Gulani Thank you very much.
Moderator Our next question comes from Dana Chandler at Cafe
Financial.
D. Chandler I wanted to revisit the cash portion of the deal. Is it
possible that the cash portion could go beyond the 50.1% if
shareholders decide to go that way?
S. Hankins No, it's not. If there are more shares tendered then would
account for 50.1%, then there's a prorated factor given so
that the total cash portion cannot exceed over 50.1%.
D. Chandler Thank you.
Moderator Ladies and Gentlemen, that does conclude our question and
answer session for today.
J. Tyson We thank everybody for your time and effort. You have
Louis' phone number. If you have follow up contact
questions, you have Steve's number. We look forward to
answering any and all new questions.
This is an exciting time for us at Tyson Foods, an exciting
time to join the folks at IBP and we're going to have some
fun. You all have a good day.
<PAGE>
Moderator Ladies and Gentlemen, this conference will be available for
replay after 2:00 p.m. today through Friday, February 2nd at
11:59 p.m. You may access the AT&T Teleconference Replay
System at any time by dialing 1-800-475-6701 and entering
the access code 561913. International participants dial 320-
365-3844. That does conclude our conference for today.
Thank you for your participation and choosing AT&T Executive
Teleconference. You may now disconnect.
About Tyson Foods, Inc.
Tyson Foods, Inc., headquartered in Springdale, Ark., is the world's
largest fully integrated producer, processor and marketer of chicken and
chicken-based convenience foods, with 68,000 team members and 7,400
contract growers in 100 communities. Tyson has operations in 18 states and
15 countries and exports to 73 countries worldwide. Tyson is the recognized
market leader in almost every retail and foodservice market it serves.
Through its Cobb-Vantress subsidiary, Tyson is also a leading chicken
breeding stock supplier. In addition, Tyson is the nation's second largest
maker of corn and flour tortillas under the Mexican Originalr brand, as
well as a leading provider of live swine.
Forward Looking Statements.
Certain statements contained in this communication are "forward-looking
statements", such as statements relating to future events and financial
performance and the proposed Tyson acquisition of IBP. These forward-
looking statements are subject to risks, uncertainties and other factors
which could cause actual results to differ materially from historical
experience or from future results expressed or implied by such forward-
looking statements. Among the factors that may cause actual results to
differ materially from those expressed in, or implied by, the statements
are the following: (i) the risk that Tyson and IBP will not successfully
integrate their combined operations; (ii) the risk that Tyson and IBP will
not realize estimated synergies; (iii) unknown costs relating to the
proposed transaction; (iv) risks associated with the availability and costs
of financing, including cost increases due to rising interest rates; (v)
fluctuations in the cost and availability of raw materials, such as feed
grain costs; (vi) changes in the availability and relative costs of labor
and contract growers; (vii) market conditions for finished products,
including the supply and pricing of alternative proteins; (viii)
effectiveness of advertising and marketing programs; (ix) changes in
regulations and laws, including changes in accounting standards,
environmental laws, and occupational, health and safety laws; (x) access to
foreign markets together with foreign economic conditions, including
currency fluctuations; (xi) the effect of, or changes in, general economic
conditions; and (xii) adverse results from on-going litigation. Tyson
undertakes no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or otherwise.
<PAGE>
IMPORTANT INFORMATION
LASSO ACQUISITION CORPORATION ("LASSO"), A WHOLLY OWNED SUBSIDIARY OF TYSON
FOODS, INC. ("TYSON") IS COMMENCING AN OFFER FOR UP TO 50.1% OF THE
OUTSTANDING SHARES OF COMMON STOCK, OF IBP, INC ("IBP") AT $30.00 NET PER
SHARE TO SELLER IN CASH. THE OFFER CURRENTLY IS SCHEDULED TO EXPIRE AT
12:00 MIDNIGHT, EASTERN STANDARD TIME, ON TUESDAY, JANUARY 16, 2001, UNLESS
EXTENDED BY LASSO IN ITS DISCRETION. TYSON'S OFFER IS BEING MADE ONLY BY
WAY OF AN OFFER TO PURCHASE AND RELATED LETTER OF TRANSMITTAL AND ANY
AMENDMENTS OR SUPPLEMENTS THERETO AND IS BEING MADE TO ALL HOLDERS OF IBP'S
SHARES. MORE DETAILED INFORMATION PERTAINING TO TYSON'S OFFER AND THE
PROPOSED MERGER WILL BE SET FORTH IN APPROPRIATE FILINGS TO BE MADE WITH
THE SEC, IF AND WHEN MADE. SHAREHOLDERS ARE URGED TO READ ANY RELEVANT
DOCUMENTS THAT MAY BE FILED WITH THE SEC BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. SHAREHOLDERS WILL BE ABLE TO OBTAIN A FREE COPY OF
ANY FILINGS CONTAINING INFORMATION ABOUT TYSON, LASSO AND IBP, WITHOUT
CHARGE, AT THE SEC'S INTERNET SITE (HTTP://WWW.SEC.GOV). COPIES OF ANY
FILINGS CONTAINING INFORMATION ABOUT TYSON CAN ALSO BE OBTAINED, WITHOUT
CHARGE, BY DIRECTING A REQUEST TO TYSON FOODS, INC., 2210 WEST OAKLAWN
DRIVE, SPRINGDALE, ARKANSAS 72762-6999, ATTENTION: OFFICE OF THE CORPORATE
SECRETARY (501) 290-4000.
Tyson and certain other persons named below may be deemed to be
participants in the solicitation of proxies. The participants in this
solicitation may include the directors and executive officers of Tyson. A
detailed list of the names of Tyson's directors and officers is contained
in Tyson's proxy statement for its 2001 annual meeting, which may be
obtained without charge at the SEC's Internet site (http://www.sec.gov) or
by directing a request to Tyson at the address provided above.
As of the date of this communication, none of the foregoing participants,
individually beneficially owns in excess of 5% of IBP's common stock.
Except as disclosed above and in Tyson's proxy statement for its 2001
annual meeting and other documents filed with the SEC, to the knowledge of
Tyson, none of the directors or executive officers of Tyson has any
material interest, direct or indirect, by security holdings or otherwise,
in Tyson or IBP.
This communication is not an offer to purchase shares of IBP, nor is it an
offer to sell shares of Tyson Class A common stock which may be issued in
any proposed merger with IBP or exchange offer for IBP shares. Any issuance
of Tyson Class A common stock in any proposed merger with IBP or exchange
offer for IBP shares would have to be registered under the Securities Act
of 1933, as amended, and such Tyson stock would be offered only by means of
a prospectus complying with the Act.
