<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
IBP, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $0.05 PER SHARE
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(Title of Class of Securities)
449223106
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(CUSIP Number)
SMITHFIELD FOODS, INC.
200 COMMERCE STREET
SMITHFIELD, VIRGINIA 23430
757-365-3000
COPY TO: COPY TO:
RICHARD J.M. POULSON ROBERT E. SPATT, ESQ.
SMITHFIELD FOODS, INC. SIMPSON THACHER & BARTLETT
200 COMMERCE STREET 425 LEXINGTON AVENUE
SMITHFIELD, VA 23430 NEW YORK, NY 10017
757-365-3000 212-455-2000
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
NOVEMBER 10, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
/X/.
<PAGE>
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1. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
Smithfield Foods, Inc.
52-0845861
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) / /
(b) / /
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3. SEC USE ONLY:
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4. SOURCE OF FUNDS:
WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
/ /
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6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Virginia
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NUMBER OF SHARES 7. SOLE VOTING POWER
BENEFICIALLY OWNED 6,714,341
BY EACH REPORTING --------------------------------------------------------
PERSON WITH 8. SHARED VOTING POWER
250,000(1)
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9. SOLE DISPOSITIVE POWER
6,714,341
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10. SHARED DISPOSITIVE POWER
0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
6,964,341(1)
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES: / /
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
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(1) Includes 250,000 shares held by Chase Manhattan Bank ("Chase"), as
trustee for the following employee benefit plans for certain employees of
Smithfield and its subsidiaries: (1) the Smithfield Foods, Inc. Salaried
Pension Plan; (2) the Smithfield Foods, Inc. Hourly Pension Plan; (3) the
Smithfield Packing Pension Plan for Bargaining Employees; (5) the Esskay
Pension Plan for Bargaining Employees; (6) the John Morrell Salaried
Employees Pension Plan; and (7) the John Morrell Hourly Employees Pension
Plan. Smithfield has shared voting power over such shares held by Chase.
<PAGE>
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6.6%(1)
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14. TYPE OF REPORTING PERSON:
CO
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<PAGE>
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1. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
SF Investments, Inc.
51-0326024
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) / /
(b) / /
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3. SEC USE ONLY:
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4. SOURCE OF FUNDS:
AF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
/ /
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6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Delaware
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NUMBER OF SHARES 7. SOLE VOTING POWER
BENEFICIALLY OWNED N/A
BY EACH REPORTING ---------------------------------------------------------
PERSON WITH 8. SHARED VOTING POWER
N/A
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9. SOLE DISPOSITIVE POWER
N/A
---------------------------------------------------------
10. SHARED DISPOSITIVE POWER
N/A
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
6,714,241
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES: / /
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
6.4%
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14. TYPE OF REPORTING PERSON:
CO
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<PAGE>
Item 1. SECURITY AND ISSUER.
This statement of beneficial ownership on Schedule 13D (this
"Schedule 13D") relates to the common stock, par value $0.05 per share (the "IBP
Common Stock"), of IBP, Inc. ("IBP"), a Delaware corporation, and is being filed
pursuant to Rule 13d-1 under the Securities Exchange Act of 1934. The address of
the principal executive office of IBP is 800 Stevens Port Drive, Dakota Dunes,
SD 57049.
Item 2. IDENTITY AND BACKGROUND.
This Schedule 13D is being filed jointly on behalf of the
following persons (collectively, the "Reporting Persons"): (1) Smithfield Foods,
Inc., a Virginia corporation ("Smithfield"), and (2) SF Investments, Inc., a
Delaware corporation ("SF Investments"). The address of the principal executive
office of Smithfield is 200 Commerce Street, Smithfield, Virginia 23340.
Smithfield is the leading producer and marketer of fresh pork and processed
meats in the United States. The address of SF Investments is 1105 N. Market St.,
Ste. 1112, Wilmington, Delaware 19899. SF Investments is a wholly owned
subsidiary of Smithfield.
To the best of Smithfield's knowledge as of the date hereof,
the name, business address, present principal occupation or employment and
citizenship of each executive officer and director of Smithfield, and the name,
principal business address of any corporation or other organization in which
such employment is conducted is set forth in Schedule I hereto. The information
contained in Schedule I is incorporated herein by reference.
To the best of SF Investment's knowledge as of the date
hereof, the name, business address, present principal occupation or employment
and citizenship of each executive officer and director of SF Investments, and
the name, principal business address of any corporation or other organization in
which such employment is conducted is set forth in Schedule II hereto. The
information contained in Schedule II is incorporated herein by reference.
During the last five years, neither of the Reporting Persons
nor, to the best of each of the Reporting Person's knowledge, any of the
executive officers or directors of Smithfield listed in Schedule I hereto or SF
Investments listed on Schedule II hereto, has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or has been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, Federal or State securities laws or finding any
violation with respect to such laws.
<PAGE>
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The source of funds used to purchase the shares of IBP Common
Stock reported herein are general corporate funds of the Reporting Persons.
Item 4. PURPOSE OF THE TRANSACTION.
The purchases by the Reporting Persons of the securities of
IBP covered hereby were effected for investment purposes. On August 21, 2000,
Smithfield filed a Statement on Schedule 13G with respect to its ownership of
IBP Common Stock.
On October 2, 2000, IBP reported that it had entered into a
merger agreement with Rawhide Holdings, a subsidiary of DLJ Merchant Banking
Partners III, L.P. ("DLJ"), for a management leveraged buyout which provides for
the acquisition of IBP through a merger pursuant to which each share of IBP
Common Stock outstanding immediately prior to the merger would be converted into
a right to receive $22.25 in cash. After completion of the merger, DLJ and its
affiliates would be the majority owner of IBP. The other owners of IBP would
include Archer Daniels Midland Company and Booth Creek Partners, both of which
are currently shareholders of IBP, and certain members of IBP's management.
On November 10, 2000, the Board of Directors of Smithfield
determined that Smithfield should make the offer described below, thus
necessitating the conversion of Smithfield's Schedule 13G to a Schedule 13D.
On November 12, 2000, Joseph W. Luter, III, Chairman of the
Board of Smithfield, sent the following letter (the "Offer Letter") to the
Special Committee of the Board of Directors of the Company:
November 12, 2000
Special Committee of the Board of Directors of IBP, Inc.
IBP, Inc.
800 Stevens Port Drive
Dakota Dunes, South Dakota 57049
Attn: Ms. JoAnn R. Smith, Chairperson:
As you know, we have great respect for IBP, which led us last August to increase
our investment in the Company to approximately 6.6%. As you can imagine, we were
both surprised and disappointed to learn of the proposed leveraged buyout of
IBP, led by the Company's management, DLJ and certain other large stockholders,
which provides for a cash out of all your stockholders other than the buyout
group at a price of $22.25 per share.
Since the announcement of the management buyout, we have spent a great deal of
time considering and analyzing the proposed buyout transaction and its
implications for our investment in the Company. We are aware of the adverse
reaction in the marketplace to the proposed management buyout. In particular, we
have noted the reaction of Brandes Investment Partners, Inc., the largest
stockholder of the Company that is not part of the buyout group, which recently
stated in a public filing, among other things, that it intends to vote against
the transaction and might consider exercising appraisal rights under Delaware
law. As the second
<PAGE>
largest stockholder of the Company that is not part of the buyout group, we also
have concerns with respect to the management buyout and the valuation of the
Company it represents.
After due consideration and review, we have concluded that we can offer a
superior transaction, and that there is a compelling logic to a combination of
our two companies in a manner that provides greater short and long term value to
IBP and benefits both of our companies and all of our respective stockholders.
Accordingly, the board of directors of Smithfield has authorized me to advise
you of our offer to acquire all of the outstanding shares of IBP common stock in
a merger in which your stockholders would receive a price of $25 per share,
payable in Smithfield common stock at an exchange ratio based on the average
trading price of Smithfield's shares for a period prior to the closing, subject
to a maximum exchange ratio of 0.878 Smithfield shares (corresponding to a
$28.46 or lower average Smithfield trading price) and a minimum exchange ratio
of 0.719 Smithfield shares (corresponding to a $34.79 or higher average
Smithfield trading price) per IBP share. Our proposal provides a 19.8% premium
over last Friday's closing price of IBP common stock, a 12.4% premium over the
price offered in the management buyout and a 36.5% premium over the closing
price of IBP on September 29, 2000, the last trading day prior to the public
announcement of the management buyout. Our proposed transaction would also be
tax-free for your stockholders and would be accounted for as a pooling of
interests, which would have significant accounting benefits for the combined
company. We would anticipate that IBP's employee stock options would be
converted into Smithfield stock options on a basis consistent with the exchange
ratio in the merger.
Our companies have had a long-standing relationship and have many complementary
businesses, factors that we believe will allow the combined company to thrive
and grow in the years to come for the benefit of all of our stockholders and
other constituencies including producers, customers and consumers. Unlike the
proposed management buyout, which provides a continuing equity interest only for
management and certain large insider stockholders of the Company (to the
exclusion of well more than three-quarters of IBP's stockholders), our proposal
both delivers more value to your stockholders and gives all of your stockholders
the opportunity to continue to share in the future appreciation of our combined
companies, thus providing a level playing field to all your stockholders without
unfairly favoring a few. In addition, based on publicly available information,
we estimate that a combination of our two companies would result in synergies of
approximately $200 million per year after our respective businesses have been
integrated, which in our proposal would be shared by all of IBP's and
Smithfield's stockholders. After giving effect to such synergies, and based on
public analyst estimates, we would expect that our proposed transaction would be
accretive to earnings in the first year.
In furtherance of the value of the combination, we recognize that great
companies are built on a foundation of great management teams. We would be
pleased to have Robert Peterson and Richard Bond serve on our management
committee after the merger and, given our high regard for your operating
management, we would envision integrating IBP's and Smithfield's management
teams in a manner that would create the strongest possible combined company.
Based on the information available to us, we do not anticipate any significant
reduction in employment levels. We would also like to discuss with you the
possibility of offering some of IBP's outside directors who may be interested
the opportunity to join our board of directors after the merger.
<PAGE>
We have reviewed the management buyout merger agreement and it is evident that
our offer constitutes a "Superior Proposal", as defined in such agreement, which
would permit you to terminate the merger agreement in a manner consistent with
its terms. As indicated above, our offer represents a 12.4% premium to the
amount of consideration offered in the management buyout, totaling approximately
$290 million of additional aggregate consideration.
Unlike the buyout transaction, our offer is not subject to a financing
condition. Of course our offer is subject to negotiation and execution of a
mutually acceptable agreement containing customary terms, the receipt of
required regulatory and stockholder approvals, our ability to utilize pooling of
interest accounting and completion of a brief confirmatory due diligence review,
including as to the recent restatement of your financial results and any ongoing
implications of such restatement.
We are confident in light of the fact that the Company has already entered into
a merger agreement that we will be able to enter into a mutually satisfactory
agreement expeditiously. We anticipate that there will be no issue with respect
to our stockholders' approval. As to regulatory matters, we have done a thorough
analysis of the regulatory approvals that would be required to consummate the
transaction, and we are confident that there are no meaningful impediments to
our offer from an antitrust or other regulatory point of view. In addition, to
the extent issues might be raised regarding concentration in certain areas of
our respective businesses, we have developed a plan to address such issues which
may include the divestiture of certain assets, and are prepared to discuss with
you and your advisors the steps that we believe will resolve any issues that
might be raised by regulators. Based on publicly available information, we and
our advisors believe that there should be no impediments to using pooling of
interest accounting and we would expect that you would not take any actions to
prevent us from accounting for the transaction in such a manner.
Since the merger agreement with respect to the management buyout does not
require you even to conclude in advance that our offer is in fact a Superior
Proposal in order to commence discussions and share information with us, but
only determine that our offer "is reasonably likely to result" in a Superior
Proposal, we would like to commence discussions with you as soon as possible. We
are prepared to discuss all aspects of our offer with you, particularly if the
results of our due diligence allow us to identify additional value or synergies
in the Company, consistent however with our policy of only participating in
transactions that we believe enhance value for our stockholders and are
accretive to earnings in the near term.
We urge you to recognize the immediate and long-term superior value of this
transaction to all of your stockholders. As you may know, our management team is
very focused on stockholder value creation and has delivered superior long-term
returns to our stockholders through our ability to manage our operations
efficiently and successfully to integrate value added acquisitions, which we are
confident we could do with IBP. We view a combination with IBP as an opportunity
to create significant value for both of our stockholder bases by continuing to
expand the movement into case ready products, by creating a national brand and
by implementing best of breed operating procedures. As a stock-for-stock
transaction, our proposal would permit our combined management team to grow the
combined business to create greater value free of the added debt burdens that
IBP would labor under in a highly leveraged transaction such as the proposed
management buyout.
Because of the importance of this proposal to our respective stockholders and in
light of our
<PAGE>
obligations under the securities laws, we are compelled to release this letter
publicly and will accordingly do so.
We look forward to meeting with you and your advisors as soon as possible so
that we can further discuss our offer and promptly enter into a definitive
agreement with respect to a transaction that benefits both of our companies and
all of our respective stockholders and constituencies.
Sincerely,
/s/ Joseph W. Luter, III
-----------------------------------
Joseph W. Luter, III
Chairman
Smithfield Foods, Inc.
The Reporting Persons reserve the right, consistent with
applicable law, to acquire additional securities of IBP (whether through open
market purchases, block trades, private acquisitions, tender or exchange offers
or otherwise), to seek to influence the management or policies of IBP, to
dispose of their securities of IBP, to modify or withdraw the proposal contained
in the Offer Letter or to formulate other purposes, plans or proposals regarding
IBP or any of its securities, in each case in light of IBP's response to the
Offer Letter, the Reporting Persons' continued evaluation of IBP, market
conditions or other factors. Such actions could result in one or more of the
transactions described in subparagraphs (a) through (j) of Item 4 of Schedule
13D.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth or incorporated by reference in
Items 2, 3 and 4 is hereby incorporated herein by reference.
SF Investments is the beneficial owner of 6,714,241 shares of
IBP Common Stock, representing approximately 6.4% of the IBP Common Stock issued
and outstanding as of November 1, 2000. Smithfield, as the sole stockholder of
SF Investments, may be deemed to beneficially own the shares directly owned by
SF Investments and therefore may be deemed to beneficially own 6,964,341 shares,
representing approximately 6.6% of IBP Common Stock issued and outstanding as of
November 1, 2000. This amount also includes 250,000 shares held by Chase
Manhattan Bank ("Chase"), as trustee for the following employee benefit plans
for certain employees of Smithfield and its subsidiaries: (1) the Smithfield
Foods, Inc. Salaried Pension Plan; (2) the Smithfield Foods, Inc. Hourly Pension
Plan; (3) the Smithfield Packing Pension Plan for Bargaining Employees; (5) the
Esskay Pension Plan for Bargaining Employees; (6) the John Morrell Salaried
Employees Pension Plan; and (7) the John Morrell Hourly Employees Pension Plan.
Smithfield has shared voting power over such shares held by Chase.
Except for George E. Hamilton, Jr., a Smithfield director, who
beneficially owns 4,000 shares of IBP common stock, to the knowledge of the
Reporting Persons, none of the directors and executive officers of the Reporting
Persons beneficially own shares of IBP common stock.
<PAGE>
Except for transactions disclosed on Schedule III, there have
been no transactions with respect to shares of IBP Common Stock, within 60 days
prior to the date hereof, by the Reporting Persons.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
There are no contracts, arrangements, understandings or
relationships between the Reporting Persons and any other person with respect to
any securities of IBP.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT DESCRIPTION
1. Press Release (including text of the November 12, 2000 letter
to the Chairperson of the IBP Special Committee) dated
November 13, 2000.
2. Press Release dated November 13, 2000.
3. Joint Filing Agreement between the Reporting Persons.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
SMITHFIELD FOODS, INC.
By: /s/ C. Larry Pope
-------------------------------
Name: C. Larry Pope
Title: Vice President and
Chief Financial
Officer
Dated: November 13, 2000
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
SF INVESTMENTS, INC.
By: /s/ Michael Cole
------------------------------
Name: Michael Cole
Title: Vice President
Dated: November 13, 2000
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF SMITHFIELD FOODS, INC.
The following table sets forth the name, business address and
present principal occupation or employment of each director and executive
officer of Smithfield Foods, Inc. Except as indicated below, each such person is
a U.S. citizen, and the business address of each such person is 200 Commerce
Street, Smithfield, Virginia 23430.
<TABLE>
<CAPTION>
Board of Directors
Name And Title Present Principal Occupation
-------------- ----------------------------
<S> <C>
Joseph W. Luter, III President, Chief Executive Officer and Chairman of the Board;
Chairman of the Board Smithfield Foods, Inc.
Robert L. Burrus, Jr. General Partner;
Director McGuireWoods LLP
Carol T. Crawford, Visiting Professor of Law;
Director George Mason University School of Law
Ray A. Goldberg, Moffett Professor of Agriculture and Business, Emeritus, Harvard
Director Business School
George E. Hamilton, Jr., Retired; formerly President and Chief Operating Officer of the
Director Smithfield Packing Company, Incorporated
Wendell H. Murphy, Private Investor; formerly Chairman of the Board and Chief
Director Executive Officer of Murphy Farms, Inc.
William H. Prestage, Chairman of the Board and Chief Executive Officer;
Director Prestage Farms, Inc.
Melvin O. Wright, Advisor;
Director PrimeCorp Finance
</TABLE>
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
<TABLE>
<CAPTION>
Name Title And Present Principal Occupation
---- --------------------------------------
<S> <C>
Joseph B. Sebring President and Chief Operating Officer;
John Morrell & Co.
Lewis R. Little President and Chief Operating Officer;
Lykes Meat Group, Inc. and The Smithfield Packing Company
Incorporated
C. Larry Pope Vice President and Chief Financial Officer;
Smithfield Foods, Inc.
<PAGE>
Richard J.M. Poulson Vice President and Senior Advisor to the Chairman;
Smithfield Foods, Inc.
</TABLE>
<PAGE>
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS
OF SF INVESTMENTS, INC.
The following table sets forth the name, business address and
present principal occupation or employment of each director and executive
officer of SF Investments, Inc. Except as indicated below, each such person is a
U.S. citizen, and the business address of each such person is 1105 N. Market
St., Ste. 1112, Wilmington, Delaware 19899.
<TABLE>
<CAPTION>
Board of Directors
Name And Title Present Principal Occupation
-------------- ----------------------------
<S> <C>
David W. Dupert, President;
Director, President Delaware Corporate Management.
Kathy McKnight, Partner;
Director Shaw Pittman
Daniel G. Stevens, Vice President and Controller;
Director Smithfield Foods, Inc.
Mary Fisher, Benefits Administrator;
Director Smithfield Foods, Inc.
Michael H. Cole Secretary and Associate General Counsel;
Director, Vice President Smithfield Foods, Inc.
</TABLE>
<PAGE>
SCHEDULE III
All transactions for the period 9/12/00 - 11/13/00
All transactions were effected by SF Investments,
Inc.
<TABLE>
<CAPTION>
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Transaction Date Number of Shares Transaction Price per Share
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<S> <C> <C> <C>
9/7/00 190,000 Open-Market Purchase $15.99
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9/8/00 217,000 Open-Market Purchase $15.93
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9/11/00 5,000 Open-Market Purchase $15.99
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10/4/00 84,000 Open-Market Sale $22.96
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</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit Description
1. Press Release (including text of the November 12, 2000 letter
to the Chairperson of the IBP Special Committee) dated
November 13, 2000.
2. Press Release dated November 13, 2000.
3. Joint Filing Agreement between the Reporting Persons.
