<PAGE>
SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
[X] Preliminary Information Statement
[_] Confidential, for Use of the Commission Only
(as permitted by Rule 14c-5(d)(2))
[_] Definitive Information Statement
TYSON FOODS, INC.
--------------------------------------------------------------------------------
(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[_] No Fee required
[X] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1) Title of each class of securities to which transaction applies:
Common Stock, par value $0.05 per share, of IBP, inc. ("IBP Shares")
--------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
57,713,798 IBP Shares/1/
--------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
$27.41 per IBP Shares
--------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
$1,581,935,203/2/
--------------------------------------------------------------------------
(5) Total fee paid:
$316,387/3/
--------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------------------
(4) Date Filed:
--------------------------------------------------------------------------
_______________________
/1/ Based upon the sum of (i) 52,822,298 IBP shares, which represents one-
half of the total number of IBP Shares outstanding minus one IBP Share and
(ii) 4,891,500 options to acquire IBP Shares, in each case outstanding as
of the close of business on December 28, 2000. This represents the number
of IBP Shares to which the actions contemplated by this Information
Statement applies. The remaining IBP Shares are the subject of a cash
tender offer by the Registrant.
/2/ Estimated for purposes of calculating the amount of the filing fee
pursuant to Rules 0-11(d) and 0-11(a)(4) under the Securities Exchange Act
of 1934,based on the product of (i) $27.41, the average of the high and low
sales price of IBP Shares on the New York Stock Exchange on January 5, 2001
and (ii) 57,713,798 IBP Shares, the number of IBP Shares outstanding at the
close of business on December 28, 2000, to which this transaction applies
assuming the exercise of all options to purchase IBP Shares expected to be
outstanding and exercisable prior to the date the transaction is to be
effected.
/3/ Calculated as 1/50 of 1% of the transaction value.
<PAGE>
TYSON FOODS, INC.
2210 WEST OAKLAWN DRIVE
SPRINGDALE, ARKANSAS 72762-6999
INFORMATION STATEMENT
January __, 2001
Dear Tyson Stockholder:
This Information Statement is furnished by the Board of Directors (the
"Board of Directors") of Tyson Foods, Inc. ("Tyson") to holders of the
outstanding shares of (i) Tyson Class A common stock, par value $0.10 per share
(the "Tyson Class A Common Stock"), and (ii) Tyson Class B common stock, par
value $0.10 per share (the "Tyson Class B Common Stock", and together with the
Tyson Class A Common Stock, the "Tyson Common Stock") in connection with an
Agreement and Plan of Merger, dated as of January 1, 2001 (the "Merger
Agreement"), among Tyson, Lasso Acquisition Corporation ("Purchaser"), a wholly
owned subsidiary of Tyson, and IBP, inc. ("IBP"), pursuant to which Tyson has
agreed to acquire IBP upon the terms and subject to the conditions set forth in
the Merger Agreement. Among other things, the Merger Agreement provides for
Tyson, through Purchaser, to purchase up to 50.1% of the issued and outstanding
common stock, par value $0.05 per share, of IBP (the "IBP Shares") for $30.00
per IBP Share in cash (the "Offer"). The Merger Agreement also provides for
Tyson, through Purchaser, to exchange Tyson Class A Common Stock valued at
$30.00 per share, subject to adjustment, for all remaining IBP Shares not owned
by Tyson (the "Exchange Offer"). We commenced the Offer on December 12, 2000
and amended the Offer on January 2, 2001 and commenced the Exchange Offer on
January [ ], 2001. Finally, the Merger Agreement provides for IBP to merge
into Purchaser, at which time each remaining IBP Share will be converted into
the right to receive Tyson Class A Common Stock valued at $30.00 per IBP share,
subject to adjustment (the "Merger" and together with the Offer and the Exchange
Offer, the "Transaction").
The attached Information Statement describes the Transaction, including the
Offer, the Exchange Offer and the Merger, and describes the Merger Agreement.
We urge you to read these materials carefully and the other transaction
contemplated by the Merger Agreement.
This Information Statement is being provided to inform you that the holders
of shares of Tyson Common Stock representing approximately 90% of the voting
power of Tyson Common Stock have delivered to Tyson a written consent approving
the issuance of Tyson Class A Common Stock pursuant to the Exchange Offer, the
Merger and the transactions contemplated by the Merger Agreement. Under the
rules of the New York Stock Exchange, the issuance of Tyson Class A Common Stock
requires stockholder approval prior to such issuance. Approval of the issuance
of Tyson Class A Common Stock will become effective on February __, 2001 [20
Business Days].
By Order of the Board of Directors
R. Read Hudson
Secretary
<PAGE>
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
This Information Statement is first being mailed to stockholders on or about
January __, 2001.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY TERM SHEET................................................................ 1
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
INFORMATION..................................................................... 4
THE TRANSACTION
Overview..................................................................... 5
The Companies................................................................ 6
Shares to be Issued - Tyson Class A Common Stock............................. 7
Purpose of the Issuance...................................................... 7
Plans for IBP................................................................ 8
Consequence of Share Issuance................................................ 8
Fairness Opinions............................................................ 8
Background................................................................... 13
Regulatory Requirements...................................................... 15
Material Federal Income Tax Consequences..................................... 16
Accounting Treatment......................................................... 16
Appraisal Rights............................................................. 16
FINANCIAL INFORMATION............................................................. 17
Selected Financial Data for Tyson............................................ 17
Selected Financial Data for IBP.............................................. 18
Certain Comparative and Pro Forma Financial Information...................... 19
THE MERGER AGREEMENT AND VOTING AGREEMENT......................................... 27
The Merger Agreement......................................................... 27
The Merger................................................................... 27
Employee Stock Options....................................................... 28
Representations and Warranties............................................... 29
Covenants of IBP............................................................. 29
Covenants of Tyson........................................................... 30
Mutual Covenants of Tyson and IBP............................................ 31
Conditions to the Merger..................................................... 32
Termination.................................................................. 32
Fees and Expenses............................................................ 34
Amendments................................................................... 35
Voting Agreement............................................................. 35
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT...................................................................... 36
Certain Beneficial Owners.................................................... 36
Tyson Common Ownership of Management......................................... 37
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION................................................................ 39
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...................................... 40
Tyson........................................................................... 40
IBP............................................................................. 40
ANNEXES.............................................................................. 41
Annex A- Fairness Opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated..... 41
Annex B -Fairness Opinion of Stephens Inc............................................ 44
</TABLE>
ii
<PAGE>
SUMMARY TERM SHEET
------------------
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION INCLUDED IN THIS INFORMATION
STATEMENT. BECAUSE THIS IS A SUMMARY, IT MAY NOT CONTAIN ALL OF THE INFORMATION
THAT IS IMPORTANT TO YOU. TO MORE FULLY UNDERSTAND THE ISSUANCE OF TYSON CLASS A
COMMON STOCK PURSUANT TO THE TRANSACTION AND THE MERGER AGREEMENT, AND FOR A
MORE COMPLETE DESCRIPTION OF THE LEGAL TERMS OF THE MERGER AGREEMENT, YOU SHOULD
READ CAREFULLY THIS ENTIRE DOCUMENT AND THE OTHER DOCUMENTS TO WHICH WE HAVE
REFERRED YOU.
OVERVIEW (PAGE 5)
. Pursuant to a merger agreement with IBP, inc., or IBP, we expect
to complete a three-step transaction in which we will acquire
100% of IBP. In the first step of the transaction, we intend to
purchase up to 50.1% of the IBP shares for $30.00 per IBP share
in cash pursuant to a tender offer. In the second step of the
transaction, we intend to offer to exchange Tyson Class A common
stock valued at $30.00 per IBP share, subject to adjustment, for
all remaining IBP shares not owned by Tyson. Finally, we intend
to cause IBP to merge into Lasso Acquisition Corporation, or
Purchaser, at which time each remaining IBP share will be
converted into the right to receive Tyson Class A common stock
valued at $30.00 per IBP share, subject to adjustment.
THE COMPANIES (PAGE 6)
. Tyson produces, distributes and markets chicken, Mexican foods,
prepared foods, animal and pet food ingredients and live swine.
. Purchaser is our wholly owned subsidiary and has not yet engaged
in any business activities.
. IBP is one of the world's largest manufacturers of fresh meats
and frozen and refrigerated food products, with 1999 annual sales
in excess of $14.0 billion.
SHARES TO BE ISSUED - TYSON CLASS A COMMON STOCK (PAGE 7)
. We expect that up to 137,165,017 shares of Tyson Class A common
stock will be issued in connection with the exchange offer, the
merger and upon the exercise of IBP options that have become
Tyson options pursuant to the merger.
. The shares of Tyson Class A common stock to be issued to acquire
IBP will have the same relative rights, preferences and
limitations as shares of Tyson Class A common stock presently
held by you.
PURPOSE OF THE ISSUANCE (PAGE 7)
<PAGE>
. The issuance of Tyson Class A common stock will facilitate the
three-step transaction in which Tyson will acquire IBP.
PLANS FOR IBP (PAGE 8)
. The acquisition of IBP will allow us to expand our business to
include the processing and marketing of beef and pork products.
CONSEQUENCE OF SHARE ISSUANCE (PAGE 8)
. After the additional shares of Tyson Class A common stock are
issued pursuant to the exchange offer and the merger, there will
be more shares of Tyson Class A common stock outstanding and
therefore, you will have a proportionally smaller percentage of
the total ownership and voting power in our company.
FAIRNESS OPINIONS (PAGE 8)
. Merrill Lynch, Pierce, Fenner & Smith Incorporated, or Merrill
Lynch, has provided an opinion, dated January 1, 2001, to our
board of directors that, as of January 1, 2001, the consideration
to be paid by us in the offer, the exchange offer and the merger,
taken as a whole, was fair to Tyson from a financial point of
view. The full text of the fairness opinion of Merrill Lynch is
set forth in Annex A.
. Stephens Inc., or Stephens has provided an opinion, dated January
1, 2001, to our board of directors that, as of January 1, 2001,
the consideration to be paid by us pursuant to the merger
agreement in the aggregate, was fair to Tyson from a financial
point of view. The full text of the fairness opinion of Stephens
Inc. is set forth in Annex B.
BACKGROUND (PAGE 13)
. We first publicly announced our interest to acquire IBP on
December 4, 2000. We and a special committee of IBP's board of
directors continued to negotiate the terms of the acquisition
through the month of December. The merger agreement was signed on
January 1, 2001.
. For a more detailed description of the events leading to the
signing of the merger agreement, see the section entitled
"Background."
FINANCIAL INFORMATION (PAGE 17)
. The Securities and Exchange Commission, or SEC, allows the
"incorporation by reference" of certain information into this
Information Statement, which means that we can disclose important
information to you by referring you to another document filed
separately with the SEC. The information
2
<PAGE>
incorporated by reference is deemed to be part of this
Information Statement, except for any information superseded by
information contained directly in this Information Statement.
This Information Statement incorporates by reference the
documents set forth in the section entitled "Incorporation of
Certain Documents by Reference," that Tyson and IBP have
previously filed with the SEC. These documents contain important
information about Tyson and IBP and their respective financial
conditions.
WHO CAN HELP ANSWER YOUR QUESTIONS
. If you have more questions about the issuance of additional
shares of Tyson Class A common stock, the acquisition of IBP or
would like additional copies of this Information Statement, you
should contact Tyson's Director of Investor Relations at the
following address:
Director of Investor Relations
Tyson Foods, Inc.
2210 West Oaklawn Drive
Springdale, Arkansas 72762-6999
(501) 290-4000
Email: [email protected]
3
<PAGE>
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
-----------------------------------------------
INFORMATION
-----------
Certain statements contained in this Information Statement 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 and livestock 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.
4
<PAGE>
THE TRANSACTION
---------------
OVERVIEW
Pursuant to an Agreement and Plan of Merger dated as of January 1, 2001,
(the "Merger Agreement"), among Tyson Foods, Inc. ("Tyson"), Lasso Acquisition
Corporation ("Purchaser"), and IBP, inc. ("IBP), Tyson has amended its tender
offer pursuant to which Tyson, through Purchaser, has offered to purchase up to
the number of IBP shares of common stock, par value $0.05 per share of IBP (the
"IBP Shares"), that represent, together with the IBP Shares owned by Tyson,
50.1% of the IBP Shares, at a purchase price of $30.00 per IBP Share, net to the
seller in cash, without interest (the "Offer").
Pursuant to the Merger Agreement, Tyson has commenced an exchange offer
(the "Exchange Offer") for all IBP Shares not purchased in the Offer. In the
Exchange Offer, Tyson has offered to exchange, for each outstanding IBP Share
not owned by Tyson, a number of shares of Tyson Class A common stock ("Tyson
Class A Common Stock") having a value of $30.00, so long as the average per
share closing 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 closing price of Tyson Class A Common
Stock is not in that range.
Following the completion of the Offer and the Exchange Offer and the
satisfaction or waiver of certain conditions in the Merger Agreement, the Merger
Agreement provides that IBP will be merged with and into Purchaser with the
Purchaser continuing as the surviving corporation (the "Merger", and together
with the Offer and the Exchange Offer, the "Transaction"). At the effective
time of the Merger (the "Effective Time"), each IBP Share outstanding
immediately prior to the Effective Time (other than IBP Shares owned by Tyson,
Purchaser or other subsidiaries of Tyson) would be converted into the right to
receive shares of Tyson Class A Common Stock having a value of $30.00 if, during
the fifteen trading day period ending on the fifth trading day before the
Effective Time, the average per share closing price of Tyson Class A Common
Stock is at least $12.60 and no more than $15.40. This $30.00 value is subject
to change if the average per share closing price of Tyson Class A Common Stock
is not in that range.
The board of directors of IBP, by unanimous vote, has approved, upon the
unanimous recommendation of the special committee (the "Special Committee") of
IBP's board of directors, the Merger Agreement and the transactions contemplated
by it, including the Offer, the Exchange Offer and the Merger.
The Merger Agreement provides that promptly upon payment by Purchaser for
IBP Shares purchased pursuant to the Offer, and from time to time thereafter,
IBP shall, upon request of Tyson, promptly use its best efforts to take all
actions necessary to cause a majority of the IBP Board to consist of Tyson's
designees.
The purpose of the Offer, the Exchange Offer and the Merger is to enable
Tyson to acquire control of, and to acquire the entire equity interest in, IBP.
5
<PAGE>
THE COMPANIES
Tyson and the Purchaser
-----------------------
Tyson is a Delaware corporation, with principal executive offices at 2210
West Oaklawn Drive, Springdale, Arkansas 72762-6999. The telephone number of
Tyson's executive offices is (501) 290-4000. Tyson produces, distributes and
markets chicken, Mexican foods, prepared foods, animal and pet food ingredients
and live swine. Tyson's goal is to be the undisputed world leader in growing,
processing and marketing chicken and chicken-based food products. Tyson's
integrated operations consist of breeding and rearing chickens, as well as the
processing, further-processing and marketing of these food products. Tyson's
products are marketed and sold to national and regional grocery chains, regional
grocery wholesalers, clubs and warehouse stores, military commissaries,
industrial food processing companies, national and regional chain restaurants or
their distributors, international export companies and domestic distributors who
service restaurants, foodservice operations such as plant and school cafeterias,
convenience stores, hospitals and other vendors. Tyson's integrated chicken
processes include genetic research, breeding, hatching, rearing, ingredient
procurement, feed milling, veterinary and other technical services, and related
transportation and delivery services.
Tyson is a fully-integrated producer, processor and marketer of a variety
of food products. Tyson presently identifies segments based on the products
offered and the nature of customers, resulting in four reported business
segments: Food Service, Consumer Products, International and Swine.
Tyson's chicken business consists of the Food Service, Consumer Products
and International segments. Food Service includes fresh, frozen and value-
enhanced chicken products sold through food service and specialty distributors
who deliver to restaurants, schools and other accounts. Consumer Products
include fresh, frozen and value-enhanced chicken products sold through retail
markets for at-home consumption and through wholesale club markets targeted to
small food service operators, individuals and small businesses. Tyson's
International segment markets and sells the full line of Tyson chicken products.
Tyson's farrow to finish swine operations, which include genetic and
nutritional research, breeding, farrowing and feeder pig finishing and the
marketing of live swine to regional and national packers, are conducted in
Arkansas, Missouri, North Carolina and Oklahoma.
Tyson's other business category includes the Prepared Foods group,
consisting of Mexican Original, Culinary Foods and Mallard's Food Products.
Mexican Original produces flour and corn tortilla products. Culinary Foods and
Mallard's Food Products produce specialty pasta and meat dishes for restaurants,
airlines and other major customers. Additionally, the other category includes
Tyson's wholly owned subsidiaries involved in supplying chicken breeding stock
and trading agricultural goods worldwide.
Purchaser is a Delaware corporation incorporated on December 8, 2000, with
principal executive offices at 2210 West Oaklawn Drive, Springdale, Arkansas
72762-6999. The telephone number of Purchaser's principal executive offices is
(501) 290-4000. To date, Purchaser has engaged in no activities other than
those incident to Purchaser's formation and the
6
<PAGE>
commencement of the Offer and the Exchange Offer. Purchaser is a wholly owned
subsidiary of Tyson.
IBP
---
IBP is a Delaware corporation, with principal executive offices at 800
Stevens Port Drive, Dakota Dunes, South Dakota 57049. The telephone number of
IBP's executive offices is (605) 235-2061. IBP is one of the world's largest
manufacturers of fresh meats and frozen and refrigerated food products, with
1999 annual sales in excess of $14.0 billion. IBP has two primary business
segments: Fresh Meats, which produces boxed beef, pork, hides and other allied
products; and Foodbrands, which manufactures various value added products
including pepperoni, pizza toppings, appetizers, prepared meals, Mexican foods,
soups, sauces, and branded and processed meats. IBP has over 60 manufacturing
locations in the United States and internationally. IBP has sales offices in
North America, Central America, Europe, and Asia. IBP employs approximately
50,000 people.
SHARES TO BE ISSUED - TYSON CLASS A COMMON STOCK
We expect that up to 137,165,017 shares of Tyson Class A Common Stock will
be issued in connection with the Exchange Offer and the Merger and in connection
with the issuance of Tyson Class A Common Stock upon exercise of options to
acquire IBP Shares that are converted into options to acquire Tyson Class A
Common Stock at the Effective Time (the "Tyson Options"). This number was
determined by assuming that 57,608,155 IBP Shares will be exchanged in the
Exchange Offer, converted in the Merger, or subject to Tyson Options at the
highest exchange ratio of 2.381 shares of Tyson Class A Common Stock for each
IBP Share. The number of IBP Shares was determined by adding (i) the number of
IBP Shares subject to options (4,891,500) and (ii) 49.9% of the total number of
outstanding IBP Shares (52,716,655), in each case as of December 28, 2000. The
shares of Tyson Class A Common Stock to be issued to acquire IBP will have the
same relative rights, preferences and limitations as shares presently held by
the holders of Tyson Class A Common Stock.
PURPOSE OF THE ISSUANCE
The issuance of Tyson Class A Common Stock in the Exchange Offer and the
Merger will facilitate the acquisition of IBP. Tyson will acquire 50.1% of the
IBP Shares for cash pursuant to the Offer. The remaining 49.9% of IBP Shares
will be acquired pursuant to the Exchange Offer and the Merger. The approval of
the issuance of Tyson Class A Common Stock is a condition to the Exchange Offer
and the Merger. Additionally, under the rules of the New York Stock Exchange,
Tyson is required to obtain stockholder approval prior to the issuance of the
additional shares of Tyson Class A Common Stock in the Transaction and pursuant
to the Tyson Options.
The Tyson stockholders can approve any action without a meeting of
stockholders by means of a written consent upon the affirmative vote of Tyson
stockholders having not less than the minimum number of votes that would be
required at a meeting at which all votes were present. Accordingly, the approval
of the issuance of Tyson Class A Common Stock in the Transaction pursuant to the
written consent requires the affirmative vote of Tyson stockholders
7
<PAGE>
having a least a majority of the votes represented by all of the outstanding
shares of Tyson Class B Common Stock (the "Tyson Class B Common Stock") and
Tyson Class A Common Stock, (collectively, the "Tyson Common Stock"). On January
[ ], 2001, the holders of shares representing approximately [90]% of the voting
power of Tyson Common Stock delivered to Tyson a written consent approving the
issuance of Tyson Class A Common Stock in the Transaction and pursuant to the
Tyson Options. As of the date of the written consent, there were [121,899,309]
shares of Tyson Class A Common Stock and [102,645,048] shares of Tyson Class B
Common Stock outstanding. Each share of Tyson Class A Common Stock is entitled
to one vote per share and each share of Tyson Class B Common Stock is entitled
to ten votes per share. Approval of the issuance of Tyson Class A Common Stock
will become effective on February [ ], 2001.
PLANS FOR IBP
The acquisition of IBP will allow Tyson to expand its business to include
the processing and marketing of beef and pork products. Tyson plans to use its
expertise to accelerate IBP's program to develop value-added convenience foods
and case ready retail products in beef and pork. Except as otherwise provided
herein, it is currently expected that, following the Merger, the business and
operations of IBP will be continued substantially as they are currently being
conducted. Tyson will continue to evaluate the business and operations of IBP
during the pendency of the Offer and the Exchange Offer and after the
consummation of the Offer, the Exchange Offer and the Merger, will take such
actions as we deem appropriate under the circumstances.
CONSEQUENCE OF SHARE ISSUANCE
After the additional shares of Tyson Class A Common Stock are issued in the
Exchange Offer and the Merger, there will be more shares of Tyson Class A Common
Stock outstanding and therefore, existing holders of shares of Tyson Class A
Common Stock will own a proportionally smaller percentage of Tyson and have a
relatively smaller percentage of the votes entitled to be cast on any matter.
Assuming that the maximum amount of 137,165,017 shares of Tyson Class A Common
Stock are issued, the newly issued Tyson Class A Common Stock will represent
approximately [53]% of the issued and outstanding Tyson Class A Common Stock;
--
[38]% of the issued and outstanding Tyson Common Stock; and [11]% of the voting
--- --
power of the issued and outstanding Tyson Common Stock.
FAIRNESS OPINIONS
The board of directors of Tyson received opinions from Merrill Lynch and
Stephens dated January 1, 2001. Copies of each of these opinions are attached
as Annexes A and B hereto. We urge you to read the opinions carefully.
Opinion of Merrill Lynch. On January 1, 2001, Merrill Lynch delivered its
-------------------------
oral opinion, which opinion was subsequently confirmed in writing, to the Tyson
Board of Directors to the effect that, as of that date, and based upon the
assumptions made, matters considered and limits of review set forth in its
opinion, the consideration to be paid by Tyson pursuant to the Offer, the
Exchange Offer and the Merger, taken as a whole, was fair from a financial point
of view to Tyson.
The full text of Merrill Lynch's written opinion, which sets forth the
assumptions made,
8
<PAGE>
matters considered and qualifications and limitations on the review undertaken
by Merrill Lynch, is attached as Annex A to this Information Statement. Each
holder of Tyson Common Stock is urged to read this opinion in its entirety.
Merrill Lynch's opinion was intended for the use and benefit of the Tyson Board
of Directors, was directed only to the fairness from a financial point of view
of the consideration to be paid by Tyson in the Transaction, did not address the
merits of the underlying decision by Tyson to engage in the Transaction and did
not constitute a recommendation to any shareholder as to how that shareholder
should vote on the issuance of Tyson Class A Common Stock pursuant to the
Exchange Offer, the Agreement and the Merger or any related matter. The
consideration was determined on the basis of negotiations between Tyson and IBP
and was approved by the Tyson Board of Directors. Tyson did not provide specific
instructions to, or place any limitations on, Merrill Lynch with respect to the
procedures to be followed or factors to be considered by it in performing its
analysis or delivering its opinion. This summary of Merrill Lynch's opinion is
qualified in its entirety by reference to the full text of the opinion attached
as Annex A to this Information Statement.
In arriving at its opinion, Merrill Lynch:
. reviewed certain publicly available business and financial
information relating to Tyson and IBP that Merrill Lynch deemed
to be relevant,
. reviewed certain information, including financial forecasts,
relating to the business, earnings, cash flow, assets,
liabilities and prospects of Tyson and IBP furnished to Merrill
Lynch by Tyson and IBP,
. conducted discussions with members of senior management and
representatives of Tyson and IBP concerning the matters described
in the previous two bullet points, as well as their respective
businesses and prospects before and after giving effect to the
Transaction,
. reviewed the market prices and valuation multiples for IBP Shares
and compared them with those of certain publicly-traded companies
that Merrill Lynch deemed to be relevant,
. reviewed the results of operations of IBP and compared them with
those of certain publicly-traded companies that Merrill Lynch
deemed to be relevant,
. participated in certain discussions and negotiations among
representatives of Tyson and IBP and their financial and legal
advisors,
. compared the proposed financial terms of the Transaction with the
financial terms of certain other transactions that Merrill Lynch
deemed to be relevant,
. reviewed the potential pro forma impact of the Transaction,
. reviewed the Merger Agreement, and
. reviewed other financial studies and analyses and took into
account other
9
<PAGE>
matters as Merrill Lynch deemed necessary, including Merrill
Lynch's assessment of general economic, market and monetary
conditions.
In preparing its opinion, Merrill Lynch assumed and relied on the accuracy
and completeness of all information supplied or otherwise made available to
Merrill Lynch, discussed with or reviewed by or for Merrill Lynch, or made
publicly available, and Merrill Lynch did not assume any responsibility for
independently verifying that information or for undertaking an independent
evaluation or appraisal of any of the assets or liabilities of Tyson or IBP and
was not furnished with any such evaluation or appraisal. In addition, Merrill
Lynch did not assume any obligation to conduct any physical inspection of the
properties or facilities of Tyson or IBP. With respect to the financial forecast
information furnished to or discussed with Merrill Lynch by Tyson or IBP,
Merrill Lynch assumed that they were reasonably prepared and reflected the best
currently available estimates and judgment of Tyson's or IBP's management as to
the expected future financial performance of Tyson or IBP, as the case may be.
Merrill Lynch further assumed that the Offer, the Exchange Offer and the Merger,
taken together, would constitute a tax-free reorganization for U.S. federal
income tax purposes.
Merrill Lynch's opinion was necessarily based upon market, economic and
other conditions as they existed and could be evaluated on, and on the
information made available to Merrill Lynch as of, the date of its opinion.
Merrill Lynch assumed that in the course of obtaining the necessary regulatory
or other consents or approvals, contractual or otherwise, for the Merger, no
restrictions, including any divestiture requirements or amendments or
modifications, would be imposed that would materially affect the contemplated
benefits of the Transaction.
In addition, Merrill Lynch expressed no opinion as to the prices at which
shares of Tyson Common Stock or IBP Shares would trade following the
announcement or consummation of the Merger, as the case may be.
The Tyson board selected Merrill Lynch to act as its financial advisor
because of Merrill Lynch's reputation as an internationally recognized
investment banking firm with substantial experience in transactions similar to
the Transaction and because Merrill Lynch is familiar with Tyson and its
business. As part of Merrill Lynch's investment banking businesses, Merrill
Lynch is continually engaged in the valuation of businesses and their securities
in connection with mergers and acquisitions, leveraged buyouts, negotiated
underwritings, secondary distributions of listed and unlisted securities and
private placements.
Under the terms of a letter agreement between Tyson and Merrill Lynch dated
December 1, 2000, Tyson agreed to pay Merrill Lynch:
. $2 million upon commencement of the Offer; and
. $14 million upon the acceptance for payment by Tyson of IBP
Shares pursuant to the Offer, against which the $2 million fee
referred to above will be credited.
Tyson has agreed to reimburse Merrill Lynch for its reasonable out-of-
pocket expenses
10
<PAGE>
incurred in connection with its engagement, including the reasonable fees and
disbursements of legal counsel, and to indemnify Merrill Lynch and related
parties from and against specified liabilities, including liabilities under the
federal securities laws, arising out of its engagement.
Merrill Lynch has, in the past, provided financial advisory and financing
services to Tyson and/or its affiliates for which it has received customary
compensation, and may continue to do so and may receive additional fees for the
rendering of those services. In addition, in the ordinary course of Merrill
Lynch's business, Merrill Lynch and its affiliates may actively trade the Tyson
Class A Common Stock and other securities of Tyson, as well as the IBP Shares
and other securities of IBP, for their own accounts and for the accounts of
customers. Accordingly, Merrill Lynch and its affiliates may at any time hold a
long or short position in such securities.
Opinion of Stephens Inc.
------------------------
On January 1, 2001, Stephens delivered its oral opinion, which opinion was
subsequently confirmed in writing, to the Tyson Board of Directors to the effect
that, as of that date, and based upon the assumptions made, matters considered
and limits of review set forth in its opinion, the consideration to be paid by
Tyson pursuant to the Merger Agreement in the aggregate was fair from a
financial point of view to Tyson.
The full text of Stephens' written opinion, which sets forth the
assumptions made, matters considered and qualifications and limitations on the
review undertaken by Stephens, is attached as Annex B to this Information
Statement. Each holder of Tyson Common Stock is urged to read this opinion in
its entirety. Stephens' opinion was intended for the use and benefit of the
Tyson Board of Directors, was directed only to the fairness from a financial
point of view of the consideration to be paid by Tyson pursuant to the Merger
Agreement, and did not address the merits of the underlying decision by Tyson to
engage in the Transaction. The consideration was determined on the basis of
negotiations between Tyson and IBP and was approved by the Tyson Board of
Directors. Tyson did not provide specific instructions to, or place any
limitations on, Stephens with respect to the procedures to be followed or
factors to be considered by it in performing its analysis or delivering its
opinion. This summary of Stephens' opinion is qualified in its entirety by
reference to the full text of the opinion attached as Annex B to this
Information Statement.
In arriving at its opinion, Stephens:
. analyzed certain publicly available financial statements and
reports regarding IBP and Tyson;
. analyzed certain internal financial statements and other financial
and operating data (including financial projections) concerning IBP
and Tyson prepared by management of IBP and Tyson;
. analyzed, balance sheet, capitalization ratios, earnings and book
value both in the aggregate and, where applicable, on a per share
basis during certain periods;
11
<PAGE>
. reviewed the reported prices and trading activity of IBP Shares and
Tyson Common Stock;
. compared the financial performance of IBP and Tyson and the prices
and trading activity of IBP Shares and Tyson Class A Common Stock
with that of certain other comparable publicly-traded companies and
their securities;
. reviewed the financial terms, to the extent publicly available, of
certain comparable transactions;
. reviewed the Merger Agreement and related documents;
. discussed with management of Tyson the operations of and future
business prospects for IBP and Tyson and the anticipated financial
consequences of the Transaction; and
. performed such other analyses and provided such other services as
we have deemed appropriate.
In arriving at its opinion, Stephens relied on the accuracy and
completeness of the information and financial data provided to Stephens by
Tyson, and Stephens' opinion is based upon such information. Stephens did not
inquire into the reliability of such information and financial data recognizing
that it was rendering only an informed opinion and not an appraisal or
certification of value. With respect to the financial projections prepared by
management of IBP and Tyson, Stephens assumed that they were reasonably prepared
on bases reflecting the best currently available estimates and judgments of the
future financial performance of IBP and Tyson. Stephens did not express any
opinion as to the prices at which Tyson Common Stock or IBP Shares would trade
following the announcement or consummation of the Transaction.
Stephens' opinion was necessarily based upon market, economic and other
conditions as they existed and could be evaluated on, and on the information
made available to Stephens as of, the date of its opinion.
The Tyson Board of Directors retained Stephens as an independent contractor
to act as financial advisor with respect to the Transaction. Stephens is a
nationally recognized investment banking and advisory firm. Stephens, as part of
its investment banking business, regularly issues fairness opinions and is
continually engaged in the valuation of companies and their securities in
connection with business reorganizations, private placements, negotiated
underwritings, mergers and acquisitions and valuations for estate, corporate and
other purposes. Stephens is familiar with Tyson and IBP and regularly provides
investment banking services to Tyson and issues periodic research reports
regarding its business activities and prospects. In the ordinary course of
business, Stephens and its affiliates at any time may hold long or short
positions, and may trade or otherwise effect transactions as principal or for
the accounts of customers, in debt or equity securities or options on securities
of Tyson and IBP.
In consideration for Stephens' services as financial advisor to Tyson,
Tyson has agreed to
12
<PAGE>
pay to Stephens a fee of $1 million upon the rendering of a fairness opinion.
Tyson has also agreed to reimburse Stephens for its reasonable out-of-pocket
expenses, including fees and disbursements of its legal counsel, incurred in
connection with its activities as financial advisor to Tyson, and to indemnify
Stephens and certain related persons against certain liabilities in connection
with its engagement, including certain liabilities under the federal securities
laws.
BACKGROUND
As part of the continuous evaluation of its businesses and plans, Tyson
regularly considers a variety of strategic options and transactions. In recent
years, as part of this process, Tyson has evaluated various alternatives for
expanding its business, including through acquisitions and discussions with IBP
from time to time.
On October 2, 2000, IBP and Donaldson, Lufkin & Jenrette, Inc. ("DLJ")
jointly announced that Rawhide Holdings Corporation, a wholly-owned subsidiary
of DLJ Merchant Banking Partners III, L.P., a private equity fund affiliated
with DLJ, had entered into an Agreement and Plan of Merger dated October 1,
2000, among IBP, Rawhide Holding Corporation and Rawhide Acquisition
Corporation, to acquire the outstanding IBP Shares in a transaction whereby each
IBP Share would be converted into the right to receive $22.25 in cash (the
"Rawhide Agreement").
On October 27, 2000, Brandes Investment Partners, L.P., Brandes Investment
Partners Inc., Brandes Holdings, L.P., Charles H. Brandes, Glenn R. Carlson and
Jeffrey A. Busby, together the holders of 9.12% of the outstanding IBP Shares,
disclosed in a public filing with the SEC their intention to vote against the
merger proposed by the Rawhide Agreement and to consider asserting their
appraisal rights under Delaware law.
On November 13, 2000, Smithfield Foods, Inc. ("Smithfield") announced in a
public filing with the SEC its offer to acquire the outstanding IBP Shares for
$25 a share payable in Smithfield common stock. Also, on November 13, 2000, the
Special Committee announced that it would begin discussions with Smithfield.
Thereafter, on November 16, 2000, IBP and Smithfield announced that they entered
into a confidentiality agreement.
On November 21, 2000, John Tyson, Chairman, President and Chief Executive
Officer of Tyson, contacted Richard Bond, President of IBP, and inquired as to
whether there might be any interest in discussing a combination of IBP and
Tyson. As a follow up to this discussion, John Tyson and other senior Tyson
executives initiated a meeting with Robert Peterson, Chairman and Chief
Executive Officer of IBP, and Mr. Bond on November 24, 2000. During the
subsequent week, Mr. Tyson initiated other conversations with both Mr. Peterson
and Mr. Bond.
On December 4, 2000, Tyson sent a letter to the Special Committee outlining
a proposal to acquire IBP, which included the following terms:
. Tyson would acquire all outstanding IBP Shares in a two-step
merger pursuant to a definitive agreement in which IBP
stockholders receive cash and Tyson Class A Common Stock valued
at $26.00 for each share IBP Share;
13
<PAGE>
. To effect the transaction, Tyson would first commence a cash
tender offer for 50.1% of outstanding IBP Shares; and
. After conclusion of the tender offer, Tyson would effect a merger
in which each remaining IBP Share would be converted into $26.00
of Tyson Class A Common Stock, subject to a maximum exchange
ratio of 2.063 Tyson shares and a minimum exchange ratio of 1.688
Tyson shares per IBP Share.
On December 4, the Special Committee sent Tyson a letter stating that the
Special Committee had determined that Tyson's proposal met the applicable
threshold under the Rawhide Agreement and was prepared to enter into discussions
with Tyson regarding its proposal.
On December 4, 2000, IBP and Tyson entered into a confidentiality agreement
(the "Confidentiality Agreement"), a copy of which is filed as an exhibit to the
Tender Offer Statement on Schedule TO filed by Tyson and the Purchaser (the
"Schedule TO"), pursuant to which Tyson agreed to keep confidential certain
information it and its advisors received from IBP and its advisors in connection
with Tyson's evaluation of a potential transaction. Under the Confidentiality
Agreement, Tyson is prohibited, prior to March 31, 2001, from making any
proposals to acquire less than all of the outstanding IBP Shares, and from
acquiring additional IBP Shares in the open market if such acquisition would
result in Tyson beneficially owning more than 9.9% of the outstanding IBP
Shares, except in each case under certain circumstances.
On December 5 and 6, 2000, representatives of Tyson and its legal and
financial advisors visited the offices of counsel to the Special Committee to
conduct preliminary due diligence. On December 8, representatives of Tyson met
with IBP's management to conduct further due diligence and to discuss issues in
connection with a possible acquisition of IBP.
On December 11, 2000, John Tyson spoke with Jo Ann R. Smith, Chairperson of
the Special Committee, informing her that Tyson would be initiating the Offer.
On December 11, 2000, Tyson announced its intention to commence the Offer. Tyson
also delivered a form of merger agreement to IBP, a copy of which was filed as
an exhibit to the Schedule TO. On December 12, 2000, Tyson commenced the Offer.
On December 18, 2000, Tyson and IBP entered into a confidentiality
agreement substantially similar to the Confidentiality Agreement, providing for
Tyson to provide due diligence information to IBP. During this period,
representatives of Tyson and IBP continued to conduct due diligence with respect
to the business and operations of the other.
On December 21, 2000, Tyson received a letter from J.P. Morgan Securities
Inc. ("JP Morgan"), on behalf of the Special Committee, inviting Tyson to submit
a "best and final offer" between 4:00 p.m. and 5:00 p.m. on Friday, December 29,
2000.
On December 27, 2000, John Tyson and other representatives of Tyson
addressed the Special Committee and its advisors by telephone with respect to
the business and operations of Tyson.
14
<PAGE>
On December 28, 2000, Tyson delivered a letter to the Special Committee
outlining the terms of a revised proposal and issued a press release disclosing
those terms which included the following terms:
. In response to the Special Committee's request, Tyson increased
its offer to acquire IBP to $27.00 per share;
. Tyson increased its tender offer to $27.00 in cash per share for
up to 50.1% of the outstanding IBP Shares and would acquire the
remaining IBP common stock for $27.00 of Tyson Class A Common
Stock, subject to the "collar". IBP stockholders would receive
$27.00 of Tyson Class A Common Stock so long as the average
closing price per share of Tyson Class A Common Stock, for a
period of fifteen trading days, was no less than $12.60 and no
more than $15.40 per share;
. Tyson's bid would remain open until the close of business on
Thursday, January 4, 2001; and
. Tyson proposed to commence an exchange offer for all IBP Shares
not purchased in the cash tender offer.
During the course of Saturday, December 30, 2000, representatives of Tyson
and the Special Committee negotiated the terms of Tyson's proposal. On December
30, 2000 Tyson increased the per share price offered in the Offer, the Exchange
Offer and the Merger to $28.50. On Sunday, December 31, 2000, representatives
of Tyson and IBP continued negotiations and the Special Committee asked Tyson to
increase its offer. On January 1, 2001, Tyson increased the per share price
offered in the Offer, the Exchange Offer and the Merger to $30.00 per share and
Tyson, the Purchaser and IBP executed the Merger Agreement. On January 2, 2001,
Tyson and Purchaser amended the terms of the Offer to, among other things,
increase the price to $30.00 per share and extend the expiration date of the
Offer to January 16, 2001.
The full text of the letters mentioned in this section are filed as
exhibits to the Schedule TO.
REGULATORY REQUIREMENTS
In connection with the Offer, the Exchange Offer and the Merger, Tyson is
required to make a number of filings with various federal and state governmental
agencies, including:
. filing of a certificate of merger with the Secretary of State of
the State of Delaware in accordance with the General Corporation
Law of the State of Delaware after the approval of the Merger by
IBP's stockholders;
. complying with federal and state securities laws and the federal
tender offer and proxy rules;
15
<PAGE>
. notifying and furnishing certain information to the Federal Trade
Commission ("FTC") and the Antitrust Division of the Department
of Justice (the "Antitrust Division") pursuant to the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act") and
. complying with any applicable non-United States laws intended to
prohibit, restrict or regulate actions having the purpose or
effect of monopolization or restraint of trade.
Under the HSR Act and the rules that have been promulgated thereunder by
the FTC, certain acquisition transactions may not be consummated unless certain
information has been furnished to the Antitrust Division and the FTC and certain
waiting period requirements have been satisfied. The acquisition of IBP is
subject to this requirement. Pursuant to the requirements of the HSR Act, Tyson
filed a Notification and Report Form with respect to the Offer, the Exchange
Offer and the Merger with the Antitrust Division and the FTC on December 12,
2000. Absent a request for additional information, the initial waiting period
applicable to the purchase of IBP Shares pursuant to the Offer was to expire at
11:59 p.m., New York City time, on Wednesday, December 27, 2000. On December 28,
2000, Tyson announced that, prior to the expiration of the waiting period, the
Antitrust Division extended the waiting period by requesting additional
information from Tyson. Therefore, the waiting period will be extended until
11:59 P.M. New York City time, on the tenth day after our substantial compliance
with such request. Thereafter, such waiting period can be extended only by
court order.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
Tyson and its existing stockholders will not recognize any gain or loss on
the issuance of Tyson Class A Common Stock in the Exchange Offer or the Merger.
ACCOUNTING TREATMENT
The Merger will be accounted for using the purchase method of accounting
method for business combinations in accordance with U.S. generally accepted
accounting principles ("GAAP").
APPRAISAL RIGHTS
Appraisal rights are not available to holders of Tyson Class A Common Stock
or Tyson Class B Common Stock in connection with the issuance of Tyson Class A
Common Stock in the Exchange Offer and the Merger.
16
<PAGE>
FINANCIAL INFORMATION
---------------------
SELECTED FINANCIAL DATA FOR TYSON
The following selected consolidated financial data relating to Tyson and
its subsidiaries for each of the five years in the period ended September 30,
2000 have been derived from Tyson's audited financial statements which have been
audited by Ernst & Young LLP, independent public auditors. See section entitled
"Certain Comparative and Pro Forma Financial Information" for information
regarding the compilation of data presented in the column below entitled "Tyson
Historical Pro Forma Combined (unaudited)." More comprehensive financial
information is included in such reports and the other documents filed by Tyson
with the SEC, which are incorporated by reference in this Information Statement.
Such reports and other documents may be obtained as described in the section
captioned "Available Information."
<TABLE>
<CAPTION>
Tyson
Historical Pro
Forma Combined
Years ended (unaudited)
----------------------------------------------------------------------- --------------
September 28, September 27, October 3, October 2, September 30, September 30,
1996 1997 1998 1999 2000 2000
------------- ------------- ---------- ---------- ------------- --------------
(in millions of dollars, except per share amounts)
<S> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Revenues............................ $6,454 $6,356 $7,414 $7,363 $7,158 $23,369
Income before minority
interest.......................... 84 186 25 242 151 263
Net income.......................... 87 186 25 230 151 263
Balance Sheet Data:
Total assets........................ $4,544 $4,411 $5,242 $5,083 $4,854 $10,764
Long-term debt...................... 1,806 1,558 1,967 1,515 1,357 3,842
Short-term borrowings............... 169 132 162 289 185 985
Stockholders' equity................ 1,542 1,621 1,970 2,128 2,175 3,756
Cash Flow Data:
Cash flows from operations.......... $ 173 $ 541 $ 496 $ 547 $ 587 $ 1,040
Cash flows from (used in)
financing activities.............. 52 (418) (27) (395) (366) 1,504
Cash flows from (used in)
investing activities.............. (222) (136) (446) (166) (206) (2,524)
Earnings Per Share Data:
Basic earnings per share............ $ 0.40 $ 0.86 $ 0.11 $ 1.00 $ 0.67 $ 0.74
Diluted earnings per share.......... $ 0.40 $ 0.85 $ 0.11 $ 1.00 $ 0.67 $ 0.73
Cash Dividends Per Share Data:
Class A Common Stock................ $0.080 $0.095 $0.100 $0.115 $0.160 $ 0.085
Class B Common Stock................ $0.072 $0.086 $0.090 $0.104 $0.144 $ 0.144
</TABLE>
------------------------
1. The results for 2000 include a $24 million pretax charge for bad debt
writeoff related to the January 31, 2000, bankruptcy filing of AmeriServe
Food Distribution, Inc. and a $9 million pretax charge related to Tyson de
Mexico losses.
2. The results for 1999 include a $77 million pretax charge for loss on sale
of assets and impairment write-downs.
3. Significant business combination accounted for as a purchase: Hudson Foods,
Inc. on January 9, 1998.
17
<PAGE>
4. The results for 1998 include a $215 million pretax charge for asset
impairment and other charges.
SELECTED FINANCIAL DATA FOR IBP
The following selected consolidated financial data relating to IBP and its
subsidiaries has been taken or derived from the audited financial statements
contained in the IBP's Current Report on Form 8-K dated November 3, 2000
("IBP 8-K"), and the unaudited financial statements contained in IBP's Quarterly
Report on Form 10-Q for the 39 weeks ended September 23, 2000 ("IBP 10-Q"). More
comprehensive financial information is included in such reports and the other
documents filed by IBP with the SEC, and the financial data set forth below is
qualified in its entirety by reference to such reports and other documents,
including the financial statements and related notes contained therein. Such
reports and other documents may be obtained as described in the section
captioned "Available Information." The selected financial balance sheet data and
cash flow data for the fiscal years ended December 30, 1995 and December 28,
1996 are derived from IBP's historical audited financial statements contained in
IBP's Annual Report on Form 10-K for the fiscal year ended December 27, 1999 and
do not give effect to the acquisition by IBP of Corporate Brand Foods America,
Inc. on February 7, 2000 (the "CBFA Acquisition"). The balance sheet data for
the nine months ended September 30, 1999 gives effect to the CBFA Acquisition
based on information provided by IBP.
<TABLE>
<CAPTION>
52 Weeks Ended 39 Weeks Ended
----------------------------------------------------- --------------------------
Dec. 30, Dec. 28, Dec. 27, Dec. 26, Dec. 25, Sept. 25, Sept. 23,
1995 1996 1997 1998 1999 1999 2000
---------- ---------- --------- -------- -------- ---------- -----------
(in millions of dollars, except per share amounts) (in millions of dollars,
except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Revenues.............................. $12,668 $12,539 $13,446 $13,277 $14,635 $10,626 $12,202
Income before
extraordinary item.................. 280 199 120 208 317 235 172
Net income............................ 258 199 120 193 317 235 157
Balance Sheet Data:
Total assets.......................... $ 2,028 $ 2,174 $ 2,972 $ 3,313 $ 4,151 $ 4,063 $ 4,395
Long-term debt........................ 261 260 635 761 790 781 663
Short-term borrowings................. 1 1 199 152 555 603 801
Stockholders' equity.................. 1,023 1,204 1,244 1,409 1,717 1,639 1,888
Cash Flow Data:
Cash flows from operations............ $ 351 $ 268 $ 207 $ 371 $ 298 $ 60 $ 215
Cash flows from
financing activities................ (174) -- 124 (15) 425 478 101
Cash flows (used in) investing
Activities........................... (146) (290) (354) (397) (720) (539) (315)
Earnings Per Share Data:
Basic earnings per share:
Before extraordinary item............. $ 2.96 $ 2.10 $ 1.25 $ 2.13 $ 3.25 $ 2.41 $ 1.60
Extraordinary item.................... (.24) -- -- (.16) -- -- (.14)
Basic earnings per share.............. 2.72 2.10 1.25 1.97 3.25 2.41 1.46
Diluted earnings per share:
Before extraordinary item............. 2.92 2.07 1.18 1.95 2.94 2.19 1.58
Extraordinary item.................... (.23) -- -- (.14) -- -- (.14)
Diluted earnings per share............ 2.69 2.07 1.18 1.81 2.94 2.19 1.44
Cash dividends per share.............. $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.075 $ 0.075
</TABLE>
18
<PAGE>
CERTAIN COMPARATIVE AND PRO FORMA FINANCIAL INFORMATION
Comparative Per Share Data. The following table sets forth, for each of the
--------------------------
periods indicated, income per share from continuing operations and book value
per share separately for Tyson and IBP on a historical basis, for Tyson on a
historical pro forma combined basis and on a historical pro forma combined basis
per IBP equivalent share. The information in the table below should be read in
conjunction with the historical financial statements of the corporations
referred to in this Information Statement in the sections captioned "Selected
Financial Data" of each of Tyson and IBP.
Tyson used an assumed exchange ratio of 2.381 in computing the historical
pro forma combined and equivalent pro forma combined per share data. Tyson
calculated this exchange ratio by dividing $30.00 by $12.60 (the closing price
of Tyson Class A Common Stock on the NYSE on January [ ], 2001 was $[ ]).
The Tyson pro forma data was derived by combining the historical
consolidated financial information of Tyson and IBP using the purchase method of
accounting for business combinations in accordance with GAAP.
IBP's equivalent pro forma per share data shows the effect of the Merger
from the perspective of an owner of IBP Shares. The information was computed by
multiplying the Tyson/IBP historical pro forma information by the assumed
exchange ratio of 2.381 and then multiplying the result by 49.9%, which
represents the percentage of total consideration for the acquisition of IBP that
will be paid in Tyson Class A Common Stock. The remaining 50.1% of IBP shares
will be purchased by Tyson for cash pursuant to the Offer.
The historical pro forma combined per share data may not be indicative of
the operating results or financial position that would have occurred if the
Merger had been consummated at the beginning of the periods indicated, and may
not be indicative of future operating results or financial position.
The information in the table below should be read in conjunction with the
historical financial statements incorporated by reference in this Information
Statement in the sections captioned "Selected Financial Data" of each of Tyson
and IBP.
<TABLE>
<S> <C>
Tyson Historical Per Share (Year ended September 30, 2000)
Earnings from continuing operations
Basic earnings per share............................................... $ 0.67
Diluted earnings per share............................................. 0.67
Cash Dividends
Class A................................................................ 0.160
Class B................................................................ 0.144
Book Value................................................................ 9.67
IBP Historical Per Share (Year ended December 25, 1999)
Earnings from continuing operations
Basic earnings per share............................................... $ 3.25
</TABLE>
19
<PAGE>
<TABLE>
<S> <C>
Diluted earnings per share............................................. 2.94
Cash dividends............................................................ 0.10
Book Value................................................................ 17.78
Tyson/IBP Historical Pro Forma Per Share (Year ended September 30, 2000
Earnings per share before extraordinary loss
Basic.................................................................. $ 0.78
Diluted................................................................ 0.78
Earnings per share after extraordinary loss
Basic.................................................................. 0.74
Diluted................................................................ 0.73
Cash dividends
Class A................................................................ 0.085
Class B................................................................ 0.144
Book Value................................................................ 10.70
Equivalent Historical Pro Forma Per Share for the IBP (Twelve Months ended
September 30, 2000)
Earnings from continuing operations
Earnings per share before extraordinary loss
Basic.................................................................. $ 0.93
Diluted................................................................ 0.93
Earnings per share after extraordinary loss
Basic.................................................................. 0.88
Diluted................................................................ 0.87
Cash dividends............................................................ 0.101
Book Value................................................................ 12.71
</TABLE>
Pro Forma Financial Information. The following Unaudited Pro Forma Combined
-------------------------------
Condensed Balance Sheet at September 30, 2000 (the "Pro Forma Balance Sheet")
and the Unaudited Pro Forma Combined Condensed Statement of Income for the
fiscal year ended September 30, 2000 (the "Pro Forma Income Statement" and,
together with the Pro Forma Balance Sheet, the "Pro Forma Financial Statements")
are presented using the purchase method of accounting to give effect to the
Merger and reflect the combination of consolidated historical financial data of
IBP and Tyson.
The Pro Forma Balance Sheet is derived from the audited financial
statements of Tyson contained in Tyson's Annual Report on Form 10-K for the
fiscal year ended September 30, 2000 (the "Tyson 10-K") and the audited
financial statements of IBP contained in the IBP 8-K in restating the fiscal
year ended December 25, 1999 for the acquisition of CBFA accounted for as a
pooling of interests) and the IBP 10-Q and is presented as if the Merger had
occurred on September 30, 2000. The Unaudited Pro Forma Combined Condensed
Income Statement for the fiscal year ended September 30, 2000 has been derived
from the audited financial statements of Tyson contained in the Tyson 10-K and
the financial statements of IBP contained in the IBP 8-K and the IBP 10-Q, and
is presented as if the Merger had occurred on October 3, 1999.
20
<PAGE>
The pro forma adjustments reflected in the Pro Forma Financial Statements
represent estimated values and amounts based on available information regarding
IBP's assets and liabilities. The actual adjustments that will result from the
Merger will be based on further evaluations and may differ substantially from
the adjustments presented herein. The Pro Forma Financial Statements are
presented for illustrative purposes only and are not necessarily indicative of
the financial position or operating results that would have been achieved had
the Merger been consummated as of the dates indicated or of the results that may
be obtained in the future.
The Pro Forma Financial Statements should be read in conjunction with the
accompanying notes and the historical financial statements of the corporations
incorporated by reference or referred to in this Information Statement in the
sections captioned "Selected Financial Data" of each of Tyson and IBP.
21
<PAGE>
TYSON FOODS, INC.
Unaudited Pro Forma Combined Balance Sheet
September 30, 2000
(in millions)
<TABLE>
<CAPTION>
(a) (b) (c) (a)+(b)+(c)
Tyson Sept. 23, 2000 Pro Forma
----------------------------------------
Foods, Inc. IBP, inc. Adjustments Combined
--------------- ------------------- ------------------ ------------------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............... $ 43 $ 35 $(1,822) (2) $ 78
1,822 (2)
Accounts receivable...................... 520 795 -- 1,315
Inventories............................. 965 722 -- 1,687
Other current assets.................... 48 95 -- 143
------ ------ ------- -------
Total Current Assets.................. 1,576 1,647 -- 3,223
Net Property, Plant and Equipment........ 2,141 1,551 -- 3,692
Excess of Investments over Net Assets
Acquired................................. 937 1,047 (1,047) (1)
2,327 (1)
235 (5) 3,499
Investments and Other
Assets.................................. 200 150 -- 350
------ ------ ------- -------
Total Assets............................. $4,854 $4,395 $ 1,515 $10,764
====== ====== ======= =======
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable............................ $ 62 $ 746 $ -- $ 808
Current portion of long-term
debt................................... 123 54 -- 177
Trade accounts payable................... 346 417 -- 763
Other accrued liabilities................ 355 450 -- 805
------ ------ ------- -------
Total Current Liabilities.............. 886 1,667 -- 2,553
Long-Term Debt........................... 1,357 663 1,822 (2) 3,842
Deferred Income Taxes.................... 385 177 -- 562
Other Liabilities........................ 51 -- -- 51
Shareholders' Equity
</TABLE>
22
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Class A Common Stock................ 14 5 (5) (3) 27
13 (4)
Class B Common Stock................ 10 -- -- 10
Capital in excess of par
value............................. 735 442 (442) (3)
1,568 (4) 2,303
Retained earnings................... 1,715 1,522 (1,522) (3) 1,715
Accumulated other
comprehensive income.............. (5) (10) 10 (3) (5)
------ ------ ----------- ------
2,469 1,959 (378) 4,050
Less treasury stock................. 284 71 (71) (3) 284
Less unamortized
deferred compensation............. 10 -- -- 10
------ ------ ----------- -------
2,175 1,888 (307) 3,756
------ ------ ----------- -------
Total Liabilities and $4,854 $4,395 $ 1,515 $10,764
Shareholders' Equity............ ====== ====== =========== =======
</TABLE>
See accompanying notes.
23
<PAGE>
TYSON FOODS, INC.
Unaudited Pro Forma Combined Condensed Statement of Income
Fiscal Year Ended September 30, 2000
(in millions)
<TABLE>
<CAPTION>
(a) (b) (c) (a)+(b)+(c) (except
per share data)
Tyson IBP, Pro Forma
------------------------------------
Foods, Inc. inc.(4) Adjustments Combined
-------------- ----------- ------------- --------------
<S> <C> <C> <C> <C>
Sales.................................. $7,158 $16,211 $ -- $23,369
Cost of Sales.......................... 6,044 15,145 -- 21,189
------ ------- -------- -------
1,114 1,066 -- 2,180
Expenses:
Selling, general and
administrative....................... 766 574 (31) (1)
64 (1) 1,373
------ ------- -------- -------
Operating Income....................... 348 492 (33) 807
Other Expenses:
Interest.......................... 115 83 146 (2) 344
Other............................. (1) -- -- (1)
------ ------- -------- -------
Income Before Taxes on
Income and Extraordinary
Loss................................. 234 409 (179) 464
Provision for Income Taxes............. 83 155 (52) (3) 186
Extraordinary Loss..................... - 15 -- 15
------ ------- -------- -------
Net Income............................. $ 151 $ 239 ($ 127) $ 263
====== ======= ======== =======
Weighted Average Shares
Outstanding
Basic............................. 225 104 351
Diluted........................... 226 107 353
Earnings Per Share before
Extraordinary Loss
Basic............................. $ 0.67 $ 2.40 $ 0.78
Diluted........................... $ 0.67 $ 2.33 $ 0.78
Earnings Per Share after
Extraordinary Loss
Basic............................. $ 0.67 $ 2.26 $ 0.74
Diluted........................... $ 0.67 $ 2.19 $ 0.73
</TABLE>
See accompanying notes.
24
<PAGE>
Notes To Unaudited Pro Forma Combined Balance Sheet
(1) To record the remaining excess of investments over net assets acquired as
follows (in millions):
<TABLE>
<CAPTION>
Purchase consideration:
<S> <C>
Cash paid for 50.1% of outstanding Shares (52,910,777 Shares at $30 per share)............. $ 1,587
Tyson Class A Common Stock issued for 49.9% of the outstanding Shares based upon an 1,581
average trading price of $12.60, which is the lower end of the range of $12.60 to
$15.40 of Tyson's average trading price of Class A Common Stock set forth in the
Merger Agreement (52,699,557 at $30).......................................................
Estimated acquisition expenses............................................................. 235
-------
Total acquisition consideration....................................................... $ 3,403
=======
Total acquisition costs allocated:
Book value of IBP's net assets acquired.................................................... $ 1,888
To eliminate IBP's excess of investment over net assets (1,047)
Acquired.................................................................................
Remaining amount of excess of investment over net assets 2,562
Acquired................................................................................. -------
Total acquisition consideration....................................................... $ 3,403
=======
</TABLE>
(2) To reflect incremental additional debt required to finance the acquisition.
The amounts reflect the additional borrowings that will be required to
purchase the Shares for cash of $1,587 million plus estimated acquisition
costs of $235 million. A portion of IBP's debt may be retired and replaced
with new debt, however it is expected that the current maturities will
approximate that presented above.
(3) To eliminate IBP's shareholders equity balances.
(4) To reflect the incremental shares of Tyson Class A Common Stock to be
issued for the acquisition based upon the maximum exchange ratio in the
Merger Agreement of 2.381.
(5) To record $67 million of termination fees to be paid to DLJ and $168
million of estimated acquisition fees.
Notes To Unaudited Pro Forma Statement Of Income
(1) To reflect amortization of the excess of investment over net assets
acquired associated with the acquisition over forty years and reverse IBP's
amortization of $31 million on existing excess of investment over net
assets acquired.
(2) To reflect increased interest expense resulting from the acquisition debt
of $1,822 million based on an assumed interest rate of 8% representing
Tyson's average interest rate for the
25
<PAGE>
fiscal year ended September 30, 2000 for total debt.
(3) To reflect the net tax benefit resulting from the additional interest
expense at Tyson's effective tax rate of 35.5%.
(4) The following schedule conforms IBP's most recent fiscal year to Tyson's
fiscal year ended September 30, 2000 (in millions):
<TABLE>
<CAPTION>
(c)
(a) (b) (a) - (b) (d) (c) + (d)
Combined
Twelve Nine Three Nine Twelve
Months Months Months Months Months
Ended Ended Ended Ended Ended
12/25/99 9/25/99 12/25/99 9/23/00 9/30/00
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Sales.............................. $14,635 $10,626 $4,009 $12,202 $16,211
Cost of Sales...................... 13,631 9,901 3,730 11,415 15,145
------- ------- ------ ------- -------
1,004 725 279 787 1,066
Expenses:
Selling, general and 446 318 128 446 574
Administrative................. ------- ------- ------ ------- -------
Operating Income................... 558 407 151 341 492
Interest Expense................... 68 49 19 64 83
------- ------- ------ ------- -------
Income Before Taxes on Income and 490 358 132 277 409
Extraordinary Loss................
Provision for Income Taxes......... 173 123 50 105 155
Extraordinary Loss................. -- -- -- 15 15
------- ------- ------ ------- -------
Net Income......................... $ 317 $ 235 $ 82 $ 157 $ 239
======= ======= ====== ======= =======
</TABLE>
26
<PAGE>
THE MERGER AGREEMENT AND VOTING AGREEMENT
-----------------------------------------
The following is a summary of the material provisions of the Merger
Agreement and the Voting Agreement, dated as of January 1, 2001, among IBP and
the Tyson Limited Partnership (the "Voting Agreement") copies of which are filed
as exhibits to the amended Schedule TO (the "Form TO/A") filed by Tyson and
Purchaser with respect to IBP on January 5, 2001. This summary is qualified in
its entirety by reference to the complete text of the Merger Agreement and the
Voting Agreement.
THE MERGER AGREEMENT
The Merger Agreement required Tyson to amend the Offer (the "Amended
Offer") and file the Form TO/A which includes a supplemental Offer to Purchase
(the "Supplement to the Offer"). Purchaser's obligation to accept for payment
and pay for IBP Shares tendered pursuant to the Amended Offer is subject to the
satisfaction or waiver of the Minimum Condition and certain other conditions
that are described below. Subject to the provisions of the Merger Agreement,
Purchaser may waive, in whole or in part at any time or from time to time prior
to the Expiration Date (as defined in the Merger Agreement), any condition to
the Amended Offer; provided that without the prior written consent of IBP, Tyson
cannot make any change that changes the form of consideration to be paid in the
Amended Offer or the Merger, decreases the price per IBP Share, increases the
Minimum Condition or the Maximum Amount (as defined in the Merger Agreement),
imposes additional conditions to the Amended Offer or amends any term or any
condition to the Amended Offer in a manner materially adverse to the holders of
the IBP Shares.
As promptly as practicable after the date of the Merger Agreement, Tyson
shall cause Purchaser to, and Purchaser shall, commence an Exchange Offer
pursuant to which Purchaser shall offer to issue, in exchange for each then
issued and outstanding IBP Share, other than IBP Shares then owned by Tyson or
Purchaser, a number of duly authorized, validly issued, fully paid and non-
assessable shares of Tyson Class A Common Stock equal to (a) if the market price
per share of Tyson Class A Common Stock is equal to or greater than $15.40,
1.948, (b) if the market price per share of Tyson Class A Common Stock is less
than $15.40 and greater than $12.60, the result of $30.00 divided by the market
price per share of Tyson Class A Common Stock, or (c) if the market price per
share of Tyson Class A Common Stock is equal to or less than $12.60, 2.381. The
"market price" per share of Tyson Class A Common Stock is the average of the
closing price per share of Tyson Class A Common Stock on the NYSE at the end of
the regular session as reported on the Consolidated Tape, Network A for the
fifteen consecutive trading days ending on the second trading day immediately
preceding the expiration date of the Exchange Offer. The obligation of Purchaser
to consummate the Exchange Offer and to issue shares of Tyson Class A Common
Stock in exchange for IBP Shares tendered pursuant to the Exchange Offer shall
be subject only to Purchaser having accepted for payment, and paid for, IBP
Shares tendered pursuant to the Offer and certain other conditions.
THE MERGER
As soon as practicable after the purchase of the IBP Shares pursuant to the
Amended Offer, the Exchange Offer, the approval of the Merger Agreement by IBP's
stockholders, if required, and the satisfaction or waiver of the other
conditions to the Merger, IBP will be merged
27
<PAGE>
with and into Purchaser, and Purchaser will be the surviving corporation (the
"Surviving Corporation").
Each IBP Share outstanding at the Effective Time (as defined in the Merger
Agreement) (other than IBP Shares owned by Tyson or any of its subsidiaries,
including Purchaser, or by IBP as treasury stock, all of which will be
cancelled), will be converted into the right to receive that number of shares of
Tyson Class A Common Stock equal to (a) if the market price per share of Tyson
Class A Common Stock is equal to or greater than $15.40, 1.948, (b) if the
market price per share of Tyson Class A Common Stock is less than $15.40 and
greater than $12.60, the result of $30.00 divided by the market price per share
of Tyson Class A Common Stock, and (c) if the market price per share of Tyson
Class A Common Stock is equal to or less than $12.60, 2.381. The "market price"
per share of Tyson Class A Common Stock is the average of the closing price per
share of Tyson Class A Common Stock on the NYSE at the end of the regular
session as reported on the Consolidated Tape, Network A for the fifteen
consecutive trading days ending on the fifth trading day immediately preceding
the Effective Time.
In the event that at February 28, 2001, the Minimum Condition has not been
satisfied, Purchaser will terminate the Amended Offer and the Exchange Offer and
Tyson, Purchaser and IBP will complete the Merger for consideration including
both cash and Tyson Class A Common Stock (the "Cash Election Merger"). In the
Cash Election Merger, each holder of IBP Shares will have the right to elect to
receive either $30.00 cash ("Cash Consideration") for each IBP Share or a number
of shares of Tyson Class A Common Stock ("Stock Consideration") equal to, (a) if
the market price per share of Tyson Class A Common Stock is equal to or greater
than $15.40, 1.948, (b) if the market price per share of Tyson Class A Common
Stock is less than $15.40 and greater than $12.60, the result of $30.00 divided
by the market price per share of Tyson Class A Common Stock, or (c) if the
market price per share of Tyson Class A Common Stock is equal to or less than
$12.60, 2.381. The "market price" per share of Tyson Class A Common Stock is
the average of the closing price per share of Tyson Class A Common Stock on the
NYSE at the end of the regular session as reported on the Consolidated Tape,
Network A for the fifteen consecutive trading days ending on the fifth trading
day immediately preceding the effective time of the Cash Election Merger. The
maximum number of IBP Shares for which Cash Consideration will be paid will be
limited to a number of the outstanding IBP Shares which, together with IBP
Shares owned by Tyson and any IBP Shares the holders of which elect to pursue
appraisal rights under the General Corporation Law of the State of Delaware,
equals 50.1% of the outstanding IBP Shares. If the number of IBP Shares the
holders of which elect Cash Consideration, together with IBP Shares owned by
Tyson and any IBP Shares the holders of which elect to pursue appraisal rights
under Delaware Law, exceeds 50.1% of the outstanding IBP Shares, such holders
will receive cash for a pro rata portion of their IBP Shares and the remaining
IBP Shares will receive Stock Consideration. The maximum number of IBP Shares
for which Stock Consideration will be paid will be limited to 49.9% of the
outstanding IBP Shares. If the number of IBP Shares the holders of which elect
Stock Consideration exceeds 49.9% of the outstanding IBP Shares, such holders
will receive Tyson Class A Common Stock for a pro rata portion of their IBP
Shares and the remaining IBP Shares will receive Cash Consideration.
EMPLOYEE STOCK OPTIONS
28
<PAGE>
At or immediately prior to the Effective Time, (1) each employee stock
option or director stock option to purchase outstanding IBP Shares under any
stock option plan of IBP, whether or not vested or exercisable (each, an "IBP
Option") will, by virtue of the Merger and without any further action on the
part of any holder thereof, be assumed by Tyson and deemed to constitute a Tyson
Option to acquire, on the same terms and conditions as were applicable under
such IBP Option, the same number of shares of Tyson Class A Common Stock as the
holder of such IBP Option would have been entitled to receive had such holder
exercised such IBP Option in full immediately prior to the Effective Time
(rounded to the nearest whole number), at a price per share (rounded down to the
nearest whole cent) equal to (x) the aggregate exercise price for the IBP Shares
otherwise purchasable pursuant to such IBP Option divided by (y) the number of
whole shares of Tyson Class A Common Stock purchasable pursuant to the Tyson
Option in accordance with the foregoing and (2) Tyson shall assume the
obligations of IBP under the stock option plans of IBP, each of which will
continue in effect after the Effective Time, and all references to IBP in such
plans, and any option granted thereunder, will be deemed to refer to Tyson,
where appropriate. The other terms of each such IBP Option, and the plans under
which they were issued, will continue to apply in accordance with their terms.
In the Merger Agreement, Tyson will agree to take, at or prior to the
Effective Time, all corporate action necessary to reserve for issuance a
sufficient number of shares of Tyson Class A Common Stock for delivery upon
exercise of the Tyson Options. The Merger Agreement provides that Tyson will
agree to file a registration statement on Form S-8, with respect to the shares
of Tyson Class A Common Stock subject to such Tyson Options and shall use
commercially reasonable efforts to maintain the effectiveness of such
registration statement (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as such Tyson Options remain
outstanding. With respect to those individuals who subsequent to the Merger will
be subject to the reporting requirements under Section 16(a) of the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), Tyson shall
administer the IBP stock option plans in a manner consistent with the exemptions
provided by Rule 16(b)(3) promulgated under the Exchange Act.
REPRESENTATIONS AND WARRANTIES
Pursuant to the Merger Agreement, Tyson and IBP have made customary
representations and warranties to the other.
COVENANTS OF IBP
Pursuant to the Merger Agreement, IBP has agreed to comply with various
covenants.
Conduct of IBP. Prior to the date that Tyson's designees constitute a
---------------
majority of IBP's Board of Directors, except as expressly permitted by the
Merger Agreement, IBP and its subsidiaries will conduct business in the ordinary
course consistent with past practices.
Other Offers. Neither IBP nor any of its subsidiaries will, or will
-------------
authorize or permit any of their officers, directors, employees, investment
bankers, attorneys, accountants, consultants or other agents or advisors to,
directly or indirectly, (x) solicit, initiate or take any action to facilitate
or encourage the submission of inquiries, proposals or offers from any person or
group
29
<PAGE>
(other than Tyson and Purchaser) relating to any Acquisition Proposal (defined
below), or agree to or endorse any Acquisition Proposal, (y) enter into or
participate in any discussions or negotiations regarding any Acquisition
Proposal, or furnish to any person or group any information with respect to its
business, properties or assets in connection with any Acquisition Proposal or
(z) grant any waiver or release under any standstill or similar agreement with
respect to any class of equity securities of IBP or any of its subsidiaries.
"Acquisition Proposal" means any offer or proposal for a merger, reorganization,
consolidation, share exchange, business combination or other similar transaction
involving IBP or any of its subsidiaries or any proposal or offer to acquire,
directly or indirectly, securities representing more than 50% of the voting
power of IBP, or a substantial portion of the assets of IBP and its subsidiaries
taken as a whole, other than the Amended Offer and the Merger contemplated by
the Merger Agreement.
Notwithstanding the foregoing, the board of directors of IBP may, prior to
the acceptance for payment of the IBP Shares pursuant to the Amended Offer, (i)
furnish information pursuant to a confidentiality letter deemed appropriate by
the Special Committee concerning IBP and its businesses, properties or assets to
a person or group who in the judgment of the Special Committee has made a bona
fide Acquisition Proposal, (ii) engage in discussions or negotiations with such
a person or group who in the judgment of the Special Committee has made a bona
fide Acquisition Proposal, (iii) following receipt of a bona fide Acquisition
Proposal, take and disclose to its stockholders a position contemplated by Rule
14e-2(a) under the Exchange Act or otherwise make disclosure to its
stockholders, (iv) following receipt of an Acquisition Proposal, fail to make or
withdraw or modify its recommendation that all stockholders of IBP who wish to
receive cash for their IBP Shares tender their IBP Shares in the Amended Offer
and approve the Merger and/or (v) taking any non-appealable, final action
ordered to be taken by IBP by any court of competent jurisdiction but, in each
case referred to in the foregoing (i), (ii) and (iv), only if (i) IBP has
complied with the terms of this "No Solicitation Covenant", (ii) IBP has
received an unsolicited Acquisition Proposal which the Special Committee
determines in good faith is reasonably likely to result in a Superior Proposal,
and (iii) IBP shall have delivered to Tyson a prior written notice advising
Tyson that it intends to take such action. "Superior Proposal" means any bona
fide written Acquisition Proposal which (i) the Special Committee determines in
good faith (after consultation with a financial advisor of nationally recognized
reputation and taking into account all the terms and conditions of the
Acquisition Proposal) is (a) more favorable to IBP and its stockholders from a
financial point of view than the transaction contemplated under the Merger
Agreement, and (b) reasonably capable of being completed, including a conclusion
that its financing, to the extent required, is then committed or is in the good-
faith judgment of the board of directors of IBP, reasonably capable of being
financed by the person making such Acquisition Proposal.
COVENANTS OF TYSON
Pursuant to the Merger Agreement, Tyson has agreed to comply with various
covenants.
Director and Officer Liability. For six years after the Effective Time,
-------------------------------
Tyson will cause the Surviving Corporation to indemnify and hold harmless the
present and former officers and directors of IBP in respect of acts or omissions
occurring prior to the Effective Time to the extent provided under the IBP's
articles of incorporation and bylaws in effect on the date of the Merger
Agreement; subject to any limitation imposed from time to time under applicable
law. In
30
<PAGE>
addition, for six years after the Effective Time, Tyson will cause the Surviving
Corporation to use its best efforts to provide officers' and directors'
liability insurance in respect of acts or omissions occurring prior to the
Effective Time covering each such officer and director currently covered by the
IBP's officers' and directors' liability insurance policy on terms with respect
to coverage and amount no less favorable than those of such policy in effect on
the date of the Merger Agreement, provided that if the aggregate annual premiums
for such insurance at any time during such period shall exceed 200% of the per
annum rate of premium paid by IBP in its last full fiscal year for such
insurance, then Tyson shall cause the Surviving Corporation to provide only such
coverage as shall then be available at an annual premium equal to 200% of such
rate.
Employee Matters. Tyson has agreed that, subject to applicable law, the
-----------------
Surviving Corporation and its subsidiaries will provide benefits to their
employees which will, in the aggregate, be comparable to those currently
provided by Tyson and its subsidiaries to their employees; provided, however,
that this provision will not apply to any employees represented for purposes of
collective bargaining.
Stock Exchange Listing. Tyson has agreed to use its reasonable best efforts
-----------------------
to cause the shares of Tyson Class A Common Stock to be issued in connection
with the Exchange Offer and the Merger to be listed on the NYSE, subject to
official notice of issuance.
Acquisitions of IBP Shares. Tyson and Purchaser have agreed not to acquire
---------------------------
any IBP Shares prior to the Effective Time or the termination of the Merger
Agreement, other than IBP Shares purchased pursuant to the Amended Offer or the
Exchange Offer.
MUTUAL COVENANTS OF TYSON AND IBP
Pursuant to the Merger Agreement, Tyson and IBP have agreed to comply with
various mutual covenants.
IBP Proxy Statement and Merger Form S-4. If Purchaser does not own at least
----------------------------------------
90% of the issued and outstanding IBP Shares following consummation of the Offer
and the Exchange Offer, the Merger Agreement provides that IBP will promptly
prepare its proxy statement (the "IBP Proxy Statement") for soliciting proxies
to vote at the special meeting of stockholders called to vote on the Merger
Agreement and the Merger.
Certain Regulatory Issues. Each party will use its reasonable best efforts
-------------------------
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by the Merger Agreement. Each party
will refrain from taking, directly or indirectly, any action contrary to or
inconsistent with the provisions of the Merger Agreement, including action which
would interfere with the Amended Offer or impair such party's ability to
consummate the Merger. The Merger Agreement provides that IBP and its board of
directors will use their reasonable best efforts to (a) take all action
necessary so that no state takeover statute or similar statute or regulation is
or becomes applicable to the Amended Offer, the Exchange Offer, the Merger or
any of the other transactions contemplated by the Merger Agreement and (b) if
any state takeover statute or similar statute or regulation becomes applicable
to any of the foregoing,
31
<PAGE>
take all action necessary so that the Amended Offer, the Exchange Offer, the
Merger and the other transactions contemplated by the Merger Agreement may be
consummated as promptly as practicable on the terms contemplated by the Merger
Agreement and otherwise to minimize the effect of such statute or regulation on
the Amended Offer, the Exchange Offer and the Merger. The Merger Agreement
provides that Tyson shall take actions as may be necessary to eliminate any
impediment under any antitrust, competition or trade regulation laws that may be
asserted by any governmental entity with respect to the Amended Offer, the
Exchange Offer or the Merger so as to enable the Amended Offer, the Exchange
Offer and the Merger to occur as soon as reasonably practicable. Without
limiting the generality of the foregoing, Tyson shall agree to divest, hold
separate, or agree to any conduct restrictions with respect to any Tyson or IBP
assets or may be required by any governmental entity in order to forego that
governmental entity bringing any action to enjoin the Offer, the Exchange Offer
or the Merger.
Public Announcements. Each of Tyson and IBP will consult with each other
---------------------
before issuing any press release or making any public statement with respect to
the Merger Agreement and to not issue any such press release or make any such
public statement prior to such consultation.
CONDITIONS TO THE MERGER
The obligations of IBP, Tyson and Purchaser to consummate the Merger are
subject to the satisfaction or, to the extent permitted by law, waiver of the
following conditions:
(a) the Merger Agreement has been approved and adopted by the stockholders
of the IBP in accordance with Delaware Law;
(b) any applicable waiting period under the HSR Act relating to the
Amended Offer and the Merger has expired or been terminated;
(c) no provision of any applicable law or regulation and no judgment,
injunction, order or decree prohibits the consummation of the Merger;
(d) the Merger Form S-4 will have been declared effective, no stop order
suspending the effectiveness of the Merger Form S-4 will be in effect and no
proceedings for such purpose will be pending before the SEC; and
(e) the shares of Tyson Class A Common Stock to be issued in the Exchange
Offer and the Merger have been approved for listing on the NYSE, subject to
official notice of issuance.
The obligation of IBP to consummate the Merger is also subject to the
condition that the Purchaser will have purchased the IBP Shares representing,
together with IBP Shares previously owned by Parent, no less than 50.1% of the
issued and outstanding IBP Shares.
TERMINATION
The Merger Agreement may be terminated and the Merger may be abandoned at
any time prior to the Effective Time (notwithstanding any approval of the Merger
Agreement by the
32
<PAGE>
stockholders of IBP):
(a) by mutual written agreement of IBP and Tyson;
(b) (i) by IBP, if the Offer has not been consummated by February 28,
2001, provided that IBP is not then in breach in any material respect of any of
its obligations under the Merger Agreement; or (ii) by either IBP or Tyson (but
in case of Tyson, only if no IBP Shares were purchased by Purchaser pursuant to
the Offer or the Exchange Offer) if the Merger has not been consummated by May
31, 2001, provided that the party seeking to exercise such right is not then in
breach in any material respect of any of its obligations under the Agreement;
(c) by either IBP or Tyson if there is any law or regulation that makes
acceptance for payment of, and payment for, the IBP Shares pursuant to the
Offer, or consummation of the Merger illegal or otherwise prohibited or any
judgment, injunction, order or decree of any court or governmental body having
competent jurisdiction permanently enjoins Purchaser from accepting for payment
of, and paying for, the IBP Shares pursuant to the Amended Offer or Purchaser,
IBP or Tyson from consummating the Merger and such judgment, injunction, order
or decree has become final and nonappealable; or
(d) by Tyson, prior to the purchase of the IBP Shares pursuant to the
Offer, (i) if the board of directors of IBP shall have withdrawn, or modified or
amended in a manner adverse to Tyson, its approval or recommendation of the
Merger Agreement, the Offer, the Exchange Offer or the Merger or its
recommendation that stockholders of IBP tender their IBP Shares pursuant to the
Offer and the Exchange Offer, adopt and approve the Merger Agreement and the
Merger or approved, recommended or endorsed any proposal for a transaction other
than the transactions hereunder (including a tender or exchange offer for IBP
Shares) or (ii) if IBP has failed to call the IBP stockholder meeting or failed
to mail the IBP Proxy Statement to its stockholders within 20 days after the
Merger Form S-4 is declared effective by the SEC or failed to include in such
statement the recommendation referred to above; or
(e) by IBP, if (i) the board of directors of IBP authorizes IBP, subject
to complying with the terms of the Merger Agreement, to enter into a binding
written agreement concerning a transaction that constitutes a Superior Proposal
(as defined in the Merger Agreement) and IBP notifies Tyson in writing at least
three business days prior to the proposed effectiveness of such termination that
it intends to enter into such an agreement, attaching a description of the
material terms and conditions thereof and permits Tyson, within such three
business day period to submit a new offer, which shall be considered by the
Special Committee in good faith (it being understood that IBP shall not enter
into any such binding agreement during such three-day period) and (ii) IBP prior
to such termination pays to Tyson in immediately available funds the Termination
Fee (defined below) and the fees required to be paid pursuant to the Merger
Agreement; or
(f) by Tyson, if prior to the acceptance for payment of the IBP Shares
under the Amended Offer, there has been a breach by IBP of any representation,
warranty, covenant or agreement contained in the Merger Agreement that is not
curable and such breach would give rise to a failure of the condition to the
Merger Agreement; or
33
<PAGE>
(g) by IBP, if prior to the acceptance for payment of the IBP Shares under
the Offer there has been a breach by Tyson of any representation, warranty,
covenant or agreement contained in the Merger Agreement that is not curable and
such breach would give rise to a failure of the condition to the Merger
Agreement (which shall be construed to apply to Tyson); or
(h) by either IBP or Tyson if, at a duly held stockholders meeting of IBP
or any adjournment thereof at which this Agreement and the Merger are voted
upon, the requisite stockholder adoption and approval shall not have been
obtained; provided, however, that Tyson shall not have the right to terminate
this Agreement or abandon the transactions contemplated hereby if IBP Shares
were purchased in the Offer.
FEES AND EXPENSES
Except as otherwise specified below, all fees and expenses incurred in
connection with the Merger Agreement and the transactions contemplated thereby
will be paid by the party incurring such expenses.
The Merger Agreement provides that if it is terminated under circumstances
which would constitute a Payment Event (as defined below), IBP would pay to
Tyson (i) if pursuant to clause (x) in the definition of "Payment Event" below,
simultaneously with the occurrence of such Payment Event or, if pursuant to
clause (y) in the definition of "Payment Event" below, within two business days
following such Payment Event, a fee of $15,000,000 (the "Termination Fee") and
(ii) a reimbursement payment of $66,500,000, in cash, together with interest
thereon, at a rate equal to the London Interbank Offered Rate plus .75%, from
January 2, 2001 to the date such payment is due pursuant to the Merger Agreement
(collectively, the "Reimbursement Payment), reflecting reimbursement of the
amounts advanced by Tyson to IBP on January 2, 2001 and used by IBP to pay the
termination fee and the out-of-pocket fees and expenses owed to Rawhide Holdings
Corporation under the Rawhide Merger Agreement. The advance is evidenced by a
note that, in the event of termination of the Merger Agreement, will be repaid
only on the terms set forth in the Merger Agreement with respect to the
Reimbursement Payment, and that will survive the consummation of the Merger if
the Merger is completed. "Payment Event" means (x) the termination of the Merger
Agreement by IBP or Tyson pursuant to subsections (d) or (e) under the section
"Termination"; or (y) the termination of the Merger Agreement pursuant to
subsections (b), (f) or (h) under the section "Termination", if at the time of
such termination (or, in the case of a termination pursuant to subsection (h)
under the section "Termination", at the time of the stockholders meeting), there
shall have been outstanding an Acquisition Proposal pursuant to which
stockholders of IBP would receive cash, securities or other consideration having
an aggregate value in excess of $30.00, and within six months of any such
termination described in clause (y) above IBP enters into a definitive agreement
for or consummates such Acquisition Proposal or another Acquisition Proposal
with a higher value than such Acquisition Proposal.
Upon the termination of the Merger Agreement under circumstances which
would constitute a Payment Event, IBP shall reimburse Tyson and its affiliates
not later than two business days after demand delivered by Tyson to IBP, the
amount of $7,500,000 representing Tyson's fees and expenses (including, without
limitation, the fees and expenses of their counsel
34
<PAGE>
and investment banking fees) and Tyson shall not be required to submit
documentation substantiating such fees and expenses.
The Merger Agreement provides that Tyson will pay to IBP a fee of $70
million if the Merger Agreement is terminated (i) by Tyson or IBP pursuant to
subsection (c) of the section "Termination" or (ii) by IBP pursuant to
subsection (b) of the section "Termination" if the inability to close is
attributable to there being any law or order enacted or entered that imposes
material limitations on Tyson's ability to operate its business, own its assets,
accept IBP Shares for payment in the Offer or acquire IBP, provided, however,
that, in each case, such termination results from any action, suit, proceeding,
judgment, writ, injunction, order or decree with respect to any antitrust,
competition or trade regulation laws that may be asserted by any governmental
entity with respect to the Offer, the Exchange Offer or the Merger.
AMENDMENTS
At any time prior to the Effective Time, the Merger Agreement may be
amended by an instrument signed by Tyson, Purchaser and IBP. However, after
adoption of the Merger Agreement by the stockholders of IBP, the Merger
Agreement may not be amended by any amendment which by law requires the further
approval of the stockholders of IBP unless the stockholders of IBP have given
their approval.
VOTING AGREEMENT
On January 1, 2001, Tyson Limited Partnership ("TLP") and IBP entered into
the Voting Agreement, a copy of which is filed as an exhibit to the Schedule TO,
pursuant to which TLP agreed to vote all of the shares of Tyson Class B Common
Stock, par value $0.10 per share, that it owns to approve the issuance of Tyson
Class A Common Stock with respect to the Exchange Offer and the Merger at
Tyson's stockholder meeting. TLP owns 102,598,560 shares of Tyson Class B Common
Stock representing approximately 90% of the voting power of Tyson, thus assuring
Tyson shareholder approval. The written consent referred to in this Information
Statement has eliminated the requirement of a Tyson stockholder meeting.
35
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of September 30, 2000
regarding the only persons known by Tyson to own, directly or indirectly, more
than 5% of Tyson Common Stock:
<TABLE>
<CAPTION>
Number of Shares Percent
Name and Address of Beneficial Owner Title of Class Beneficially Owned of Class
------------------------------------ -------------- ------------------ --------
<S> <C> <C> <C>
Don Tyson and Tyson Limited Class B Common Stock 102,598,560(1) 99.9
Partnership
2210 West Oaklawn Drive
Springdale, AR 72762-6999
Sanford C. Bernstein & Co., Inc. Class A Common Stock 11,750,340(2) 9.6
One North Lexington Avenue
White Plains, NY 10601-1785
</TABLE>
(1) Inclues 750,000 shares of Tyson Class B Common Stock owned of record by
Don Tyson, Senior Chairman of the Board of Tyson, and 101,848,560 shares of
Tyson Class B Common Stock owned of record by the Tyson Limited
Partnership, a Delaware limited partnership (the "Partnership"). Don Tyson
has a 54.3123 combined percentage interest as a general and limited partner
in the Partnership and the Estate of Randal Tyson has a 45.062 percentage
interest as a limited partner in the Partnership. Barbara A. Tyson, the
widow of Randal Tyson and a Director of Tyson, has limited dispositive
power with respect to, and is the principal income beneficiary of, the
Estate of Randal Tyson. Don Tyson's adult children, including John H.
Tyson, Chairman, President and Chief Executive Officer of Tyson, are
contingent beneficiaries of such estate. The managing general partner of
the Partnership is Don Tyson. The other general partners are Leland E.
Tollett, a Director of Tyson; Barbara Tyson; John H. Tyson; James B. Blair
and Harry C. Erwin, III. Don Tyson, as managing general partner, has the
exclusive right, subject to certain restrictions, to do all things on
behalf of the Partnership necessary to manage, conduct, control and operate
the Partnership's business, including the right to vote all shares or other
securities held by the Partnership, as well as the right to mortgage,
pledge or grant security interests in any assets of the Partnership. The
Partnership terminates December 31, 2040. Additionally, the Partnership may
be dissolved upon the occurrence of certain events, including (i) a written
determination by the managing general partner that the projected future
revenues of the Partnership will be insufficient to enable payment of costs
and expenses, or that such future revenues will be such that continued
operation of the Partnership will not be in the best interest of the
partners, (ii) an election to dissolve the Partnership by the managing
general partner that is approved by the affirmative vote of a majority in
percentage interest of all general partners, and (iii) the sale of all or
substantially all of the Partnership's assets and properties. The
withdrawal of the managing
36
<PAGE>
general partner or any other general partner (unless such partner is the
sole remaining general partner) will not cause a dissolution of the
Partnership. Upon dissolution of the Partnership, each partner, including
all limited partners, will receive in cash or otherwise, after payment of
creditors, loans from any partner, and return of capital account balances,
their respective percentage interests in the Partnership assets. In
addition to the above-listed shares of Tyson Class B Common Stock, the
Partnership also is the record owner of 200,000 shares of Tyson Class A
Common Stock.
(2) Based solely on information obtained from a Form 13F filed by AXA
Financial, Inc. ("AXA") with the Securities and Exchange Commission (the
"SEC") on or about November 13, 2000. Alliance Capital Management L.P., a
subsidiary of AXA, acquired beneficial ownership of 11,750,340 shares of
Tyson Class A Common Stock through its acquisition of the investment
advisory assets of Sanford C. Bernstein & Co., Inc. on October 2, 2000. The
number of shares beneficially owned as of October 31, 2000, as reported by
AXA in its Form 13F was 12,360,690 shares. The foregoing information has
been included solely in reliance upon, and without independent
investigation of, the disclosures contained in AXA's Form 13F.
TYSON COMMON STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information with respect to the
beneficial ownership of Tyson Common Stock, as of September 30, 2000, by Tyson
directors, nominees for election as directors, names executive officers and by
all director and executive officers as a group:
<TABLE>
<CAPTION>
Shares Shares of Percentage of
of Class A Common Percent of Class B Common Outstanding Aggregate
Stock Beneficially Outstanding Class Stock Beneficially Class B Common Voting
Name of Beneficial Owner Owned (1) A Common Stock Owned (1) Stock Percentage
<S> <C> <C> <C> <C> <C>
Don Tyson (2)(3) 278,197 * 102,598,560 99.9 89.4
Leland E. Tollett (4) 3,184,024 2.6 *
Joe F. Starr (5) 2,033,833 1.7 *
Neely E. Cassady 1,232,862 1.0 *
Donald E. Wray 790,258 * *
Gerald M. Johnston 739,347 * *
John H. Tyson (4)(5) 623,442 * *
Greg W. Lee 198,981 * *
Barbara A. Tyson (4) 160,682 * *
John S. Lea 94,842 * *
William W. Lovette 68,950 * *
Fred S. Vorsanger 33,000 * *
Shelby D. Massey 25,778 * *
Lloyd V. Hackley 11,018 * *
Jim Kever -0- * *
Barbara Allen -0- * *
David A. Jones -0- * *
All Directors and Executive Officers
as a Group (29 persons) 9,313,616 8.1 102,598,560 99.9 90.2
</TABLE>
___________________
* Indicates ownership or aggregate voting percentage of less than 1%.
37
<PAGE>
(1) Includes beneficial ownership of shares with respect to which voting or
investment power may be deemed to be directly or indirectly controlled.
Accordingly, the shares shown in the foregoing table include shares owned
directly, shares held in such person's accounts under the Tyson's Employee
Stock Purchase Plan and Retirement Savings Plan, shares owned by certain of
the individual's family members and shares held by the individual as a
trustee or in a fiduciary or other similar capacity, unless otherwise
disclaimed and/or described below. Also includes shares subject to
presently exercisable options held by certain named individuals.
(2) Includes 200,000 shares of Tyson Class A Common Stock owned of record by
the Tyson Limited Partnership.
(3) Includes all shares of Tyson Class B Common Stock owned of record by the
Tyson Limited Partnership as described in Footnote 1 to the Principal
Shareholders table.
(4) Does not include any shares of Tyson Class A Common Stock and Tyson Class B
Common Stock owned of record by the Tyson Limited Partnership of which
Leland E. Tollett, John H. Tyson and Barbara Tyson have a general
partnership interest. See Footnote 1 to the Principal Shareholders table.
(5) Does not include 485,900 shares of Tyson Class A Common Stock held by the
Tyson Foundation, a nonprofit charitable organization. Joe F. Starr and
John H. Tyson are trustees of the Tyson Foundation and disclaim beneficial
ownership of all such shares.
38
<PAGE>
AVAILABLE INFORMATION
---------------------
Tyson and IBP file annual, quarterly and special reports, proxy statements
and other information with the SEC under the Exchange Act. You may read and
copy this information at the following locations of the SEC:
<TABLE>
<CAPTION>
<S> <C> <C>
Public Reference Room North East Regional Office Midwest Regional Office
450 Fifth Street, N.W. 7 World Trade Center 500 West Madison Street
Room 1024 Suite 1300 Suite 1400
Washington, D.C. 20549 New York, New York 10048 Chicago, Illinois 60661-2511
</TABLE>
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. The public may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The SEC also maintains a web site that contains reports, proxy statements
and other information about issuers, like Tyson and IBP, who file electronically
with the SEC. The address of that site is http://www.sec.gov.
You can also inspect reports, proxy statements and other information about
Tyson at the offices of the New York Stock Exchange, 20 Broad Street, New York,
New York 10005.
39
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
-----------------------------------------------
TYSON
The following documents heretofore filed by Tyson under the Exchange Act
with the SEC are incorporated herein by reference:
(1) Tyson's Annual Report on Form 10-K for the year ended September 30,
2000; and
(2) Tyson's Proxy Statement dated December 8, 2000.
IBP
The following documents heretofore filed by IBP under the Exchange Act with
the SEC are incorporated herein by reference:
(1) IBP's Annual Report on Form 10-K for the year ended December 25, 1999;
(2) IBP's Quarterly Reports on Form 10-Q for the quarterly periods ended
March 25, June 24, and September 23, 2000;
(3) IBP's Proxy Statement dated on March 21, 2000; and
(4) IBP's Current Reports on Form 8-K dated October 2 and November 3,
2000.
Tyson will provide without charge to each person to whom a copy of this
Information Statement has been delivered, on written or oral request, a copy of
any and all of the documents referred to above that have been or may be
incorporated by reference herein other than exhibits to such documents (unless
such exhibits are specifically incorporated by reference herein). Requests will
be delivered by first class mail or other equally prompt means within one
business day of receipt of such request. Requests for such copies should be
directed to: TYSON FOODS, INC., 2210 WEST OAKLAWN DRIVE, SPRINGDALE, ARKANSAS
72762-6999, ATTENTION: OFFICE OF THE CORPORATE SECRETARY, (501) 290-4000.
All documents filed by Tyson pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Information Statement shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Information Statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Information Statement.
40
<PAGE>
ANNEX A
[LETTERHEAD OF MERRILL LYNCH]
January 1, 2001
Board of Directors
Tyson Foods, Inc.
2210 West Oaklawn Drive
Springdale, Arkansas 72762
Members of the Board of Directors:
IBP, inc. (the "Company"), Tyson Foods, Inc. (the "Acquiror") and Lasso
Acquisition Corporation, a wholly owned subsidiary of the Acquiror (the
"Acquisition Sub"), have entered into an Agreement and Plan of Merger dated as
of January 1, 2001 (the "Agreement") pursuant to which (i) the Acquiror and the
Acquisition Sub will amend the outstanding tender offer (the "Offer") to acquire
50.1% of the issued and outstanding shares of common stock, par value $.05 per
share, of the Company (the "Company Shares"), including Company Shares already
owned by the Acquiror, to reflect a purchase price of $30.00 per share net to
the seller in cash (the "Cash Consideration"), (ii) the Acquiror and the
Acquisition Sub will commence an offer to exchange (the "Exchange Offer") for
each Company Share not accepted for payment and paid for in the Offer the number
of shares (the "Stock Consideration") of Class A Common Stock, par value $0.10
per share, of the Acquiror (the "Acquiror Shares") equal to the Exchange Offer
Ratio (as defined below), and (iii) the Company will be merged with and into the
Acquisition Sub in a merger (the "Merger") in which each Company Share not
acquired in the Offer and the Exchange Offer, other than Company Shares held in
treasury or owned by the Acquiror or any of its subsidiaries, all of which shall
be canceled, would be converted into the right to receive the number of Acquiror
Shares (the "Merger Consideration", and collectively with the Cash Consideration
and the Stock Consideration, taken as a whole, the "Consideration") equal to the
Exchange Ratio (as defined below). The Offer, the Exchange Offer and the Merger,
taken together, are referred to as the "Transaction".
For purposes of our opinion: (i) the term "Exchange Offer Ratio" shall be
equal to (a) if the Average Price (as defined below) is equal to or greater than
$15.40, 1.948 Acquiror Shares (b) if the Average Price is less than $15.40 and
greater than $12.60, the number of Acquiror Shares equal to $30.00 divided by
the Average Price, or (c) if the Average Price is equal to or less than $12.60,
2.381 Acquiror Shares; (ii) the term "Exchange Ratio" shall be equal to (a) if
the Average Acquiror Common Stock Price (as defined below) is equal to or
greater than $15.40, 1.948 Acquiror Shares, (b) if the Average Acquiror Common
Stock Price is less than $15.40 and greater than $12.60, the number of Acquiror
Shares equal to $30.00 divided by the Average Acquiror Common Stock Price, or
(c) if the Average Acquiror Common Stock Price is equal to
A-1
<PAGE>
or less than $12.60, 2.381 Acquiror Shares; (iii) the term "Average Price" means
the average of the closing price per share of the Acquiror Shares on the New
York Stock Exchange for the 15 trading days ending on the second trading day
immediately preceding the expiration date of the Exchange Offer; and (iv) the
term "Average Acquiror Common Stock Price" means the average of the closing
price per share of the Acquiror Shares on the New York Stock Exchange for the 15
trading days ending on the fifth trading day immediately preceding the effective
date of the merger.
You have asked us whether, in our opinion, the Consideration to be paid by
the Acquiror pursuant to the Transaction is fair from a financial point of view
to the Acquiror.
In arriving at the opinion set forth below, we have, among other things:
(1) Reviewed certain publicly available business and financial information
relating to the Company and the Acquiror that we deemed to be
relevant;
(2) Reviewed certain information, including financial forecasts, relating
to the business, earnings, cash flow, assets, liabilities and
prospects of the Company and the Acquiror furnished to us by the
Company and the Acquiror, respectively;
(3) Conducted discussions with members of senior management and
representatives of the Company and the Acquiror concerning the matters
described in clauses 1 and 2 above, as well as their respective
businesses and prospects before and after giving effect to the
Transaction;
(4) Reviewed the market prices and valuation multiples for the Company
Shares and compared them with those of certain publicly traded
companies that we deemed to be relevant;
(5) Reviewed the results of operations of the Company and compared them
with those of certain publicly traded companies that we deemed to be
relevant;
(6) Compared the proposed financial terms of the Transaction with the
financial terms of certain other transactions that we deemed to be
relevant;
(7) Participated in certain discussions and negotiations among
representatives of the Company and the Acquiror and their financial
and legal advisors;
(8) Reviewed the potential pro forma impact of the Transaction;
(9) Reviewed the Agreement; and
(10) Reviewed such other financial studies and analyses and took into
account such other matters as we deemed necessary, including our
assessment of general economic, market and monetary conditions.
In preparing our opinion, we have assumed and relied on the accuracy and
completeness of all information supplied or otherwise made available to us,
discussed with or reviewed by or for us, or publicly available, and we have not
assumed any responsibility for independently verifying such information or
undertaken an independent evaluation or appraisal of any of the assets or
liabilities of the Company or the Acquiror or been furnished with any such
evaluation or appraisal. In addition, we have not assumed any obligation to
conduct any physical inspection
A-2
<PAGE>
of the properties or facilities of the Company or the Acquiror. With respect to
the financial forecast information furnished to or discussed with us by the
Company or the Acquiror, we have assumed that they have been reasonably prepared
and reflect the best currently available estimates and judgment of the Company's
or the Acquiror's management as to the expected future financial performance of
the Company or the Acquiror, as the case may be. We have further assumed that
the Offer, the Exchange Offer and the Merger, taken together, will qualify as a
tax-free reorganization for U.S. federal income tax purposes.
Our opinion is necessarily based upon market, economic and other conditions
as they exist and can be evaluated on, and on the information made available to
us as of, the date hereof. We have assumed that in the course of obtaining the
necessary regulatory or other consents or approvals (contractual or otherwise)
for the Transaction, no restrictions, including any divestiture requirements or
amendments or modifications, will be imposed that will have a material adverse
effect on the contemplated benefits of the Transaction.
We are acting as financial advisor to the Acquiror in connection with the
Transaction and will receive a fee from the Acquiror for our services, a
significant portion of which is contingent upon the acceptance for payment by
the Acquiror of Company Shares pursuant to the Offer. In addition, the Acquiror
has agreed to indemnify us for certain liabilities arising out of our
engagement. We have, in the past, provided financial advisory and financing
services to the Acquiror and/or its affiliates and may continue to do so and
have received, and may receive, fees for the rendering of such services. In
addition, in the ordinary course of our business, we may actively trade the
Company Shares and other securities of the Company as well as the Acquiror
Shares and other securities of the Acquiror, for our own account and for the
accounts of customers and, accordingly, may at any time hold a long or short
position in such securities.
This opinion is for the use and benefit of the Board of Directors of the
Acquiror. Our opinion does not address the merits of the underlying decision by
the Acquiror to engage in the Transaction and does not constitute a
recommendation to any shareholder of the Acquiror as to how such shareholder
should vote on the issuance of the Acquiror Shares pursuant to the Exchange
Offer, the Merger and the transactions contemplated by the Agreement or any
matter related thereto.
We are not expressing any opinion herein as to the prices at which the
Acquiror Shares will trade following the announcement or consummation of the
Transaction.
On the basis of and subject to the foregoing, we are of the opinion that,
as of the date hereof, the Consideration to be paid by the Acquiror pursuant to
the Transaction is fair from a financial point of view to the Acquiror.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
A-3
<PAGE>
ANNEX B
[LETTERHEAD OF STEPHENS INC.]
January 1, 2001
Board of Directors
Tyson Foods, Inc.
2210 West Oaklawn Drive
Springdale, Arkansas 72762-6999
Ladies and Gentlemen:
We have acted as your financial advisor in connection with the proposed
merger (the "Transaction") among Tyson Foods, Inc. ("Tyson"), Lasso Acquisition
Corporation ("Puchaser"), a wholly-owned subsidiary of Tyson, and IBP, inc.
("IBP" or the "Company"), pursuant to which Tyson will acquire the Company.
Among other things, the Agreement and Plan of Merger dated as of January 1, 2001
(the "Merger Agreement") provides for Tyson, through Purchaser, to purchase up
to 50.1% of the common stock, par value $.05 per share of IBP (the "IBP Common
Stock"), for $30.00 per IBP share in cash. The Merger Agreement also provides
for Tyson, through Purchaser, to exchange its Class A Common Stock valued (in
accordance with the terms of the Merger Agreement) at $30.00 for each IBP share,
subject to adjustment, for all remaining IBP shares not then owned by Tyson.
Finally, the Merger Agreement provides for IBP to merge into Purchaser, at which
time each remaining IBP share will be converted into the right to receive Tyson
Class A Common Stock valued at $30.00, subject to adjustment (the "Merger"). The
terms and conditions of the Transaction are more fully set forth in the Merger
Agreement.
You have requested our opinion as to whether the consideration to be paid
pursuant to the Merger Agreement in the aggregate is fair from a financial point
of view to Tyson.
In connection with rendering our opinion we have:
(i) analyzed certain publicly available financial statements and reports
regarding the Company and Tyson;
(ii) analyzed certain internal financial statements and other financial
and operating data (including financial projections) concerning the
Company and Tyson prepared by management of the Company and Tyson;
(iii) analyzed, on a pro forma basis, the effect of the Transaction on
Tyson's balance sheet, capitalization ratios, earnings and book value
both in the aggregate and, where applicable, on a per share basis
during certain periods;
B-1
<PAGE>
(iv) reviewed the reported prices and trading activity of the IBP Common
Stock and Tyson Class A Common Stock;
(v) compared the financial performance of the Company and Tyson and the
prices and trading activity of the IBP Common Stock and Tyson Class
A Common Stock with that of certain other comparable publicly-traded
companies and their securities;
(vi) reviewed the financial terms, to the extent publicly available, of
certain comparable transactions;
(vii) reviewed the Merger Agreement and related documents;
(viii) discussed with management of Tyson the operations of and future
business prospects for the Company and Tyson and the anticipated
financial consequences of the Transaction; and
(ix) performed such other analyses and provided such other services as we
have deemed appropriate.
We have relied on the accuracy and completeness of the information and
financial data provided to us by Tyson, and our opinion is based upon such
information. We have not inquired into the reliability of such information and
financial data recognizing that we are rendering only an informed opinion and
not an appraisal or certification of value. With respect to the financial
projections prepared by management of the Company and Tyson, we have assumed
that they have been reasonably prepared on bases reflecting the best currently
available estimates and judgments of the future financial performance of the
Company and Tyson.
As part of our investment banking business, we regularly issue fairness
opinions and are continually engaged in the valuation of companies and their
securities in connection with business reorganizations, private placements,
negotiated underwritings, mergers and acquisitions and valuations for estate,
corporate and other purposes. We are familiar with the Company and Tyson and
regularly provide investment banking services to Tyson and issue periodic
research reports regarding its business activities and prospects. In the
ordinary course of business, Stephens and its affiliates at any time may hold
long or short positions, and may trade or otherwise effect transactions as
principal or for the accounts of customers, in debt or equity securities or
options on securities of the Company and Tyson. Stephens is receiving a fee, and
reimbursement of its expenses, in connection with the issuance of this fairness
opinion.
Based on the foregoing and our general experience as investment bankers,
and subject to the qualifications stated herein, we are of the opinion on the
date hereof that the consideration to be paid pursuant to the Merger Agreement
in the aggregate is fair from a financial point of view to Tyson.
B-2
<PAGE>
This opinion and a summary discussion of our underlying analyses and role
as your financial advisor may be included in communications to Tyson's and the
Company's shareholders provided that we approve of such disclosures prior to
publication.
Very truly yours,
STEPHENS INC.
B-3
