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Filed by Tyson Foods, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12(b)
under the Securities Exchange Act of 1934
Subject Company: IBP, inc.
Commission File No. 1-6085
December 15, 2000
Media Contact: Ed Nicholson
(501) 290-4591
Investor Contact: Louis Gottsponer
(501) 290-4826
Tyson Foods Speeds Up Bid Process For IBP Inc. With
Hart-Scott-Rodino Filing and Investor Outreach
Tyson Chairman Says Tyson-IBP Combination is Supported by Unique Strategic
Fit, Attractive Offer, and Likelihood of Completion
NEW YORK, NY, Dec. 14 - Tyson Foods, Inc. (NYSE: TSN) Chairman, President
and CEO John Tyson told investors today that the company is moving forward
rapidly to complete its merger and that it has filed for regulatory
approvals under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
He also stated that the company's bid makes sense for reasons of strategy,
value, financial dynamics and regulatory certainty. Addressing investors in
New York City, Tyson outlined the case for why Tyson Foods' bid is the
strongest on the table for IBP shareholders:
- Unique Strategic Fit. Tyson stated that the combined experience and
expertise of the two category leaders brings an unparalleled ability
to develop innovative, branded food products and market them
successfully through all distribution channels. In addition to
holding leading market positions in supermarkets, club stores and
restaurants, Tyson Foods has taken the poultry industry years ahead
of other meat categories with regard to case-ready and value added
meat products, as well as with branding. He noted the company's
past record and outlined Tyson Foods's capacity to leverage this
competency to the pork and beef industries.
- Attractive Offer. Tyson observed that his bid's $26 per IBP share
price represents a significant premium to IBP's current stock price
and highlighted the attractiveness of the offer's 50% cash
structure, noting that it not only provides higher net present value
to shareholders but also reduces the impact of stock market
volatility on the purchase price. Additionally, under the terms of
the Tyson Foods offer, IBP shareholders will be able to see payment
almost immediately, receiving the cash portion of their holdings
within 30-60 days from the time of shareholder and regulatory
approvals.
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- Little regulatory risk = high likelihood of successful completion.
The horizontal structure of the merger would entail negligible
change in the competitive landscape for the beef, pork and poultry
markets - providing for a higher degree of certainty for completion
of the transaction with minimal regulatory barriers. With no
overlapping production facilities and no material alteration in the
sourcing of raw materials, Tyson noted, the transaction is far less
threatening to farmers than Smithfield's bid. Industry observers
have been unequivocal in the assessment that Smithfield's bid
presents far greater risk of incompletion due to regulatory
concerns, and experts note that Smithfield will likely need to sell
more than 30% of IBP's pork operations to appease regulators.
- Strong merger partner. Tyson presented the company's strong balance
sheet and credit profile, demonstrating its ability to finance the
cash component of its offer price from existing sources. By keeping
its balance sheet conservatively leveraged, Tyson stated, the
company will maintain better access to capital - at lower rates - as
well as a strong investment grade credit rating.
Tyson said this week's announcement of the tender offer, as well as the
Hart-Scott-Rodino filing were issued in order to begin clearing regulatory
barriers and to give IBP shareholders the opportunity to quickly receive
their cash consideration upon shareholder and regulatory approval of Tyson
Foods's offer.
Tyson also noted that his company has traditionally and consistently had a
higher earnings multiple than Smithfield, and emphasized the forward-
looking nature of the transaction. "We expect this acquisition to be
immediately and significantly accretive to our earnings. But this merger
is about looking to the future, and what we're creating is a "protein
powerhouse" with a global presence in poultry, beef and pork that is
unmatched in the industry," Tyson stated.
"With the consolidation of retail, food service and club store channels, a
Tyson-IBP combination fits the emerging customer model by creating a
protein powerhouse with industry-leading capacity to manage the 'meat case'
for three major proteins through the entire distribution chain," Tyson
said.
About Tyson Foods, Inc.
Tyson Foods, Inc., headquartered in Springdale, Ark., is the world's
largest fully integrated producer, processor and marketer of chicken and
chicken-based convenience foods, with 68,000 team members and 7,400
contract growers in 100 communities. Tyson has operations in 18 states and
15 countries and exports to 73 countries worldwide. Tyson is the recognized
market leader in almost every retail and foodservice market it serves.
Through its Cobb-Vantress subsidiary, Tyson is also a leading chicken
breeding stock supplier. In addition, Tyson is the nation's second largest
maker of corn and flour tortillas under the Mexican Originalr brand, as
well as a leading provider of live swine.
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Forward Looking Statements.
Certain statements contained in this press release are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995, such as statements relating to Tyson's belief that the
proposed transaction is expected to be immediately accretive to earnings;
the regulatory review and approvals to be triggered by the proposed
transaction; the prospects and financial condition of the combined
operations of Tyson and IBP; the ability of the parties to successfully
consummate the transaction and integrate the operations of the combined
enterprises; the intended qualification of the proposed transaction as a
tax-free reorganization; and other 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 risks that Tyson and IBP will not successfully
integrate their combined operations; (ii) the risk that Tyson and IBP will
not realize estimated synergies; (iii) unknown costs relating to the
proposed transaction; (iv) risks associated with the availability and costs
of financing, including cost increases due to rising interest rates; (v)
fluctuations in the cost and availability of raw materials, such as feed
grain costs; (vi) changes in the availability and relative costs of labor
and contract growers; (vii) market conditions for finished products,
including the supply and pricing of alternative proteins; (viii)
effectiveness of advertising and marketing programs; (ix) changes in
regulations and laws, including changes in accounting standards,
environmental laws, and occupational, health and safety laws; (x) access to
foreign markets together with foreign economic conditions, including
currency fluctuations; (xi) the effect of, or changes in, general economic
conditions; and (xii) adverse results from on-going litigation. Tyson
undertakes no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or otherwise.
Important Information.
The information in this news release concerning IBP and the proposed
transactions by IBP management and Smithfield Foods has been taken from, or
is based upon, publicly available information. Although Tyson does not have
any information that would indicate that any information contained in this
news release that has been taken from such documents is inaccurate or
incomplete, Tyson does not take any responsibility for the accuracy or
completeness of such information. To date, Tyson has not had access to the
books and records of IBP.
MORE DETAILED INFORMATION PERTAINING TO TYSON'S PROPOSAL WILL BE SET FORTH
IN APPROPRIATE FILINGS TO BE MADE WITH THE SEC, IF AND WHEN MADE.
SHAREHOLDERS ARE URGED TO READ ANY RELEVANT DOCUMENTS THAT MAY BE FILED
WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SHAREHOLDERS
WILL BE ABLE TO OBTAIN A FREE COPY OF ANY FILINGS CONTAINING INFORMATION
ABOUT TYSON AND IBP, WITHOUT CHARGE, AT THE SEC'S INTERNET SITE
(HTTP://WWW.SEC.GOV). COPIES OF ANY FILINGS CONTAINING INFORMATION ABOUT
TYSON CAN ALSO BE OBTAINED, WITHOUT CHARGE, BY DIRECTING A REQUEST TO TYSON
FOODS, INC., 2210 WEST OAKLAWN DRIVE, SPRINGDALE, ARKANSAS 72762-6999,
ATTENTION: OFFICE OF THE CORPORATE SECRETARY (501) 290-4000.
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Tyson and certain other persons named below may be deemed to be
participants in the solicitation of proxies. The participants in this
solicitation may include the directors and executive officers of Tyson. A
detailed list of the names of Tyson's directors and officers is contained
in Tyson's proxy statement for its 2000 annual meeting, which may be
obtained without charge at the SEC's Internet site (http://www.sec.gov) or
by directing a request to Tyson at the address provided above.
AS OF THE DATE OF THIS PRESS RELEASE, NONE OF THE FOREGOING PARTICIPANTS,
INDIVIDUALLY BENEFICIALLY OWNS IN EXCESS OF 5% OF IBP'S COMMON STOCK.
EXCEPT AS DISCLOSED ABOVE AND IN TYSON'S PROXY STATEMENT FOR ITS 2000
ANNUAL MEETING AND OTHER DOCUMENTS FILED WITH THE SEC, TO THE KNOWLEDGE OF
TYSON, NONE OF THE DIRECTORS OR EXECUTIVE OFFICERS OF TYSON HAS ANY
MATERIAL INTEREST, DIRECT OR INDIRECT, BY SECURITY HOLDINGS OR OTHERWISE,
IN TYSON OR IBP.
