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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 29, 2000
Press Release issued by Tyson dated December 28, 2000
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Exhibit (a)(13)
Media Contact: Ed Nicholson
(501) 290-4591
Investor Contact: Louis Gottsponer
(501) 290-4826
Tyson Increases its Offer to Acquire IBP to $27.00 Per Share
SPRINGDALE, AR, December 28, 2000 -- Tyson Foods, Inc. (NYSE: TSN) today
announced that it is increasing its offer to acquire IBP, inc. (NYSE: IBP) from
$26.00 per share to $27.00 per share. Under the terms of the revised proposal,
IBP shareholders will receive $27.00 for each share of IBP common stock, with
50% of the consideration in cash and 50% in Tyson Class A common stock.
Tyson Foods Chairman, President and CEO John Tyson stated, "Our proposal and the
manner in which we are delivering it delivers superior value to IBP's
shareholders. We remain the best bidder, with the best terms - representing a
premium of 8% over Smithfield's offer - and in the best position to close
quickly."
In fact, Mr. Tyson said, "Tyson is prepared to take all actions necessary to
gain antitrust approval due to the company's confidence that it can address
limited regulatory concerns, based on active discussions with the U.S.
Department of Justice." He noted that while DOJ has made a second request with
respect to the company's Hart-Scott-Rodino filing, the company "expects to be
able to answer quickly the DOJ's concerns and be cleared of all HSR issues
without undue delay."
In a letter submitted to IBP's Special Committee, Tyson emphasized that the
company is committed "to getting a transaction completed with certainty and
speed" and outlined additional improved terms, including:
o Waiving of a break-up fee, with a requirement that IBP cover Tyson's
expenses;
o Assumption of all risk of antitrust prohibitions and conditions placed
on a Tyson/IBP combination - including agreement to pay a $70 million
break-up fee if the acquisition does not get completed due to
antitrust concerns;
o Preparation to commence an exchange offer for all shares not purchased
in the cash tender offer promptly after a merger agreement is signed
-- delivering the equity portion of the consideration to IBP
stockholders at least two to three months earlier than originally
planned; and
o Maintaining a collar protection for IBP shareholders providing that
the average trading price of Tyson's stock is within a range of $12.60
to $15.40.
--more--
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Tyson increases IBP offer--page 2
The increased offer comes in response to an invitation from the Special
Committee of the Board of Directors of IBP to participate in a closed bidding
process on December 30, 2000. Commenting upon the closed process Mr. Tyson said,
"We appreciate the Special Committee's efforts to bring this process to a speedy
and final conclusion. However, submitting blind bids after the market closes on
New Year's weekend changes the rules in the middle of the process."
"The bidding for IBP began in public when Smithfield announced its proposal. We
also responded publicly and are making our new proposal public. We believe it is
inappropriate to now move the process behind closed doors without the
opportunity for the marketplace to react to the various bids," Mr. Tyson said.
"A public process provides marketplace feedback necessary for proper evaluation
by the Special Committee."
A copy of the letter to the IBP Special Committee is attached to this release.
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
Original(R) brand, as well as a leading provider of live swine.
Forward Looking Statements.
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Certain statements contained in this communication are "forward-looking
statements", such as statements relating to future events and financial
performance and the proposed Tyson acquisition of IBP. These forward-looking
statements are subject to risks, uncertainties and other factors which could
cause actual results to differ materially from historical experience or from
future results expressed or implied by such forward-looking statements. Among
the factors that may cause actual results to differ materially from those
expressed in, or implied by, the statements are the following: (i) the risk that
Tyson and IBP will not successfully integrate their combined operations; (ii)
the risk that Tyson and IBP will not realize estimated synergies; (iii) unknown
costs relating to the proposed transaction; (iv) risks associated with the
availability and costs of financing, including cost increases due to rising
interest rates; (v) fluctuations in the cost and availability of raw materials,
such as feed grain costs; (vi) changes in the availability and relative costs of
labor and contract growers; (vii) market conditions for finished products,
including the supply and pricing of alternative proteins; (viii) effectiveness
of advertising and marketing programs; (ix) changes in regulations and laws,
including changes in accounting standards, environmental laws, and occupational,
health and safety laws; (x) access to foreign markets together with foreign
economic conditions, including currency fluctuations; (xi) the effect of, or
changes in, general economic conditions; and (xii) adverse results from on-going
litigation. Tyson undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information, future
events or otherwise.
IMPORTANT INFORMATION
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LASSO ACQUISITION CORPORATION ("LASSO"), A WHOLLY OWNED SUBSIDIARY OF TYSON
FOODS, INC. ("TYSON") HAS COMMENCED AN OFFER FOR UP TO 50.1% OF THE
--more--
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Tyson increases IBP offer--page 3
OUTSTANDING SHARES OF COMMON STOCK, OF IBP, INC ("IBP") AT $27.00 NET PER SHARE
TO SELLER IN CASH. THE OFFER CURRENTLY IS SCHEDULED TO EXPIRE AT 12:00 MIDNIGHT,
EASTERN STANDARD TIME, ON THURSDAY, JANUARY 11, 2001, UNLESS EXTENDED BY LASSO
IN ITS DISCRETION. TYSON'S OFFER IS BEING MADE ONLY BY WAY OF AN OFFER TO
PURCHASE AND RELATED LETTER OF TRANSMITTAL AND ANY AMENDMENTS OR SUPPLEMENTS
THERETO AND IS BEING MADE TO ALL HOLDERS OF IBP'S SHARES. MORE DETAILED
INFORMATION PERTAINING TO TYSON'S OFFER AND THE PROPOSED MERGER WILL BE SET
FORTH IN APPROPRIATE FILINGS TO BE MADE WITH THE SEC, IF AND WHEN MADE.
SHAREHOLDERS ARE URGED TO READ ANY RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE
SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SHAREHOLDERS WILL BE ABLE
TO OBTAIN A FREE COPY OF ANY FILINGS CONTAINING INFORMATION ABOUT TYSON, LASSO
AND IBP, WITHOUT CHARGE, AT THE SEC'S INTERNET SITE (HTTP://WWW.SEC.GOV). COPIES
OF ANY FILINGS CONTAINING INFORMATION ABOUT TYSON CAN ALSO BE OBTAINED, WITHOUT
CHARGE, BY DIRECTING A REQUEST TO TYSON FOODS, INC., 2210 WEST OAKLAWN DRIVE,
SPRINGDALE, ARKANSAS 72762-6999, ATTENTION: OFFICE OF THE CORPORATE SECRETARY
(501) 290-4000.
Tyson and certain other persons named below may be deemed to be participants in
the solicitation of proxies. The participants in this solicitation may include
the directors and executive officers of Tyson. A detailed list of the names of
Tyson's directors and officers is contained in Tyson's proxy statement for its
2001 annual meeting, which may be obtained without charge at the SEC's Internet
site (http://www.sec.gov) or by directing a request to Tyson at the address
provided above.
As of the date of this communication, none of the foregoing participants,
individually beneficially owns in excess of 5% of IBP's common stock. Except as
disclosed above and in Tyson's proxy statement for its 2001 annual meeting and
other documents filed with the SEC, to the knowledge of Tyson, none of the
directors or executive officers of Tyson has any material interest, direct or
indirect, by security holdings or otherwise, in Tyson or IBP.
This communication is not an offer to purchase shares of IBP, nor is it an offer
to sell shares of Tyson Class A common stock which may be issued in any proposed
merger with IBP. Any issuance of Tyson Class A common stock in any proposed
merger with IBP would have to be registered under the Securities Act of 1933, as
amended, and such Tyson stock would be offered only by means of a prospectus
complying with the Act.
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December 28, 2000
Special Committee of the Board of Directors of IBP, inc.
IBP, inc.
800 Stevens Port Drive
Dakota Dunes, SD 57049
Re: Tyson Foods, Inc. and IBP, inc.
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Ladies and Gentlemen:
We have received the letter of JP Morgan dated December 21, 2000,
inviting Tyson Foods, Inc. to submit a proposal with respect to the acquisition
of IBP, inc. Thank you for your invitation. I am confident that this proposal
will result in an agreement to bring Tyson and IBP together to form a unique
company.
In response to the Special Committee's request, Tyson is increasing its
offer to acquire IBP to $27.00 per share. This is clearly the best offer for IBP
stockholders and represents a premium of 8% over Smithfield's $25.00 nominal
offer, and a much higher premium to any Smithfield offer after applying a
realistic discount of at least 10% for regulatory uncertainty and significant
timing delays. We will increase our tender offer to $27.00 in cash per share for
up to 50.1% of the outstanding IBP common stock and will acquire the remaining
IBP common stock for $27.00 of Tyson Class A common stock, subject to our
"collar". IBP stockholders will 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, is no less than $12.60 and no more than $15.40
per share. Our bid will remain open until the close of business on Thursday,
January 4, 2001, five business days before the expiration date of our cash
tender offer.
We are also improving the other terms of our proposal. We are
delivering to your lawyers a copy of the merger agreement executed by Tyson. In
this agreement we have addressed your lawyers' comments and have added features
that demonstrate our commitment to getting a transaction completed with
certainty and speed. Here are the most significant points:
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o We will not require a break-up fee. We will only require that IBP pay
us $7.5 million to cover our expenses and repay the Rawhide advance if
the merger agreement is terminated under circumstances which would
have previously entitled us to a break-up fee.
o As you requested, we will take all actions necessary to gain
regulatory approval for a Tyson/IBP combination. We will assume all
the risk of anti-trust authorities prohibiting or imposing significant
conditions on a Tyson/IBP combination. To support that commitment, we
will agree to pay a break-up fee of $70 million to IBP if Tyson does
not complete the acquisition because of constraints imposed by the
anti-trust authorities.
o To deliver the stock consideration of our proposed transaction as
quickly as possible, we will commence an exchange offer for all shares
not purchased in the cash tender offer. We will commence our exchange
offer promptly after you sign a merger agreement. This will deliver
the back-end portion of the consideration to your stockholders at
least two to three months earlier than if they had to wait for us to
complete a merger.
o We will agree to your request to advance the Rawhide break-up fee on
terms substantially similar to those suggested by your lawyers.
We note that the Department of Justice has made a second request with
respect to our HSR filing. However, we had active discussions with the DOJ with
respect to certain limited matters prior to the holiday season. We expect to be
able to answer quickly the DOJ's concerns and be cleared of all HSR issues
without undue delay.
We appreciate the Special Committee's efforts to bring this process to
a speedy and final conclusion. However, submitting blind bids after the market
closes on New Year's weekend changes the rules in the middle of the process. The
bidding for IBP began in public when Smithfield announced its proposal. We also
responded publicly and will be making our new proposal public. We believe it is
inappropriate to now move the bidding behind closed doors without the
opportunity for the marketplace to react to the various bids. A closed process
has already once produced an anemic offer that, in hindsight, could have been
higher and was sharply criticized by your stockholders and the marketplace. That
contract cost IBP stockholders a substantial break-up fee. You should not want
to repeat such a process.
A public process will only benefit IBP's stockholders and the Special
Committee in their effort to evaluate competing bids. You will recall that
Smithfield's stock price declined significantly after announcing its original
proposal in November and continued to trade below
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the collar as long as the market saw Smithfield as the only bidder. If
Smithfield were to increase its nominal bid, we believe that the market would
then again dramatically revalue Smithfield's stock to reflect a reduced value
based on the issuance of additional shares, resulting in a dramatic adjustment
in the actual value of Smithfield's bid. Accordingly, any bid submitted by
Smithfield should be either discounted substantially or announced publicly along
with its material terms. A public process provides marketplace feedback
necessary for proper evaluation by the Special Committee.
Although we are choosing not to participate in the blind bidding
process, we remain the bidder with the best terms and in the best position to
close quickly. We are confident that the market will agree with this view. We
are intent on acquiring IBP in a transaction that is mutually beneficial to your
shareholders and ours, but will now only consider future bids against a known
offer, one in which all of the merger terms are fully described. If, however,
you choose to exclude Tyson by committing to a transaction with Smithfield
behind closed doors and without the benefit of marketplace feedback, we will
have no choice but to take our proposal directly to IBP's stockholders and let
them decide between Tyson and Smithfield. We would be forced to challenge any
arrangement you agree to with Smithfield which includes a break-up fee.
Upon reflection, we believe you will see that our proposal and the
manner in which it is presented will deliver superior value to IBP stockholders.
Our challenge to you is to act for the benefit of all stockholders and not
acquiesce in granting any break-up fees which deprive stockholders of
significant value. If Smithfield is not prepared to participate in the spotlight
of publicity, you should sign an agreement with us because our offer is clearly
superior. We are not asking for a break-up fee and Smithfield can publicly bid
later if it so chooses.
I look forward to hearing from you and to moving forward on bringing
our two great companies together.
Very truly yours,
John H. Tyson
Chairman, President and
Chief Executive Officer
