-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UqN/jCDBv4KpV1e3tkCXaiCvvcMQF3mgJszhAx+YMdUzFoqFlYilEBwF/PmYDE9g n3QRmA1MyIlzNsoPQmhbjg== 0000900440-03-000013.txt : 20030609 0000900440-03-000013.hdr.sgml : 20030609 20030609081202 ACCESSION NUMBER: 0000900440-03-000013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030607 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030609 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONAGRA FOODS INC /DE/ CENTRAL INDEX KEY: 0000023217 STANDARD INDUSTRIAL CLASSIFICATION: MEAT PACKING PLANTS [2011] IRS NUMBER: 470248710 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07275 FILM NUMBER: 03736639 BUSINESS ADDRESS: STREET 1: ONE CONAGRA DR CITY: OMAHA STATE: NE ZIP: 68102 BUSINESS PHONE: 4025954000 MAIL ADDRESS: STREET 1: ONE CONAGRA DRIVE CITY: OMAHA STATE: NE ZIP: 68102 FORMER COMPANY: FORMER CONFORMED NAME: CONAGRA INC /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: NEBRASKA CONSOLIDATED MILLS CO DATE OF NAME CHANGE: 19721201 8-K 1 cag8k.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 June 7, 2003 Date of Report (Date of earliest event reported) ConAgra Foods, Inc. (Exact name of registrant as specified in its charter) Delaware 1-7275 47-0248710 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) One ConAgra Drive, Omaha, Nebraska 68102-5001 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (402) 595-4000 Item 5. Other Events. ConAgra Foods, Inc. signed an agreement on June 7, 2003 to sell its chicken business to Pilgrim's Pride Corporation. The press release announcing the transaction, and a related Q&A posted on ConAgra Foods' website, are attached as exhibits and incorporated by reference. The purchase price to be paid by Pilgrim's Pride to ConAgra Foods is approximately $590 million. As payment for this business, ConAgra Foods expects to receive: o $100 million in cash, o $235 million in shares of Pilgrim's Pride Class A stock, and o $255 million in subordinated notes, payable by Pilgrim's Pride to ConAgra Foods The number of Class A shares issued by Pilgrim's Pride to ConAgra Foods as part of the payment for this business will be the lesser of 39.4 million shares or the number of shares determined by taking 45% of the estimated purchase price, divided by the greater of (1) the volume weighted average trading price for the period June 10, 2003 through 5 trading days prior to closing, or (2) $5.35. Pilgrim's Pride is not required to issue more than 39.4 million Class A shares in total. The remaining balance of the purchase price will be paid with the subordinated notes. If the average closing price for the Class A shares is less than $5.35 for the period measured prior to closing, Pilgrim's Pride is expected to provide additional cash, notes, and/or stock to make up the difference between $5.35 and the average share price for the period measured. If Pilgrim's Pride does not provide additional cash, notes, and/or stock to make up that difference, ConAgra Foods has the right to terminate the agreement. After the transaction, ConAgra Foods' fresh chicken requirements will be supplied at market terms by Pilgrim's Pride for use in ConAgra Foods' branded products. The closing of the transaction is subject to closing conditions, and shareholders representing a majority of Pilgrim's Pride current shareholder votes have agreed to vote in favor of the issuance of the Class A shares in the transaction. Item 7(c). Exhibits 99.1 Press release dated June 9, 2003. 99.2 Questions and Answers Item 9. Regulation FD Disclosure The following information, intended to be furnished under "Item 12. Disclosure of Results of Operations and Financial Condition" of Form 8-K, is instead being furnished under this "Item 9. Regulation FD Disclosure" in accordance with SEC Release No. 33-8216. As described in the press release and related Q&A, the transaction will result in a pretax charge of approximately $112 million, or $.14 per share after tax, in ConAgra Foods' quarter ended May 25, 2003. The press release announcing the transaction and the related Q&A, attached as exhibits, also provide other financial information about the business being sold. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CONAGRA FOODS, INC. Date: June 9, 2003 By: /s/ J.P. O'Donnell --------------------------------- Name: J.P. O'Donnell Title: Executive Vice President, Chief Financial Officer and Corporate Secretary EXHIBIT INDEX Exhibit Description 99.1 Press release dated June 9, 2003................................ 99.2 Questions and Answers........................................... EX-99.1 3 pressrel.txt _ FOR IMMEDIATE RELEASE CONAGRA FOODS ANNOUNCES SALE OF CHICKEN PROCESSING BUSINESS; $590 MILLION DEAL EXPECTED TO CLOSE THIS SUMMER OMAHA, Neb., June 9, 2003 -- ConAgra Foods, Inc. (NYSE: CAG), one of America's leading packaged food companies, today announced that it has agreed to sell its chicken business to Pilgrim's Pride Corporation (NYSE: CHX). This divestiture, which is expected to close in the summer of 2003, is part of ConAgra Foods' ongoing plan to reshape its portfolio to focus on its branded and value-added food businesses. Terms of the Agreement The purchase price to be paid by Pilgrim's Pride to ConAgra Foods is approximately $590 million. As payment for this business, ConAgra Foods will receive: o $100 million in cash, o $235 million in the form of Pilgrim's Pride Class A stock, based on the June 6, 2003 Class A closing price, and o $255 million in the form of subordinated notes, payable by Pilgrim's Pride to ConAgra Foods. Bruce Rohde, ConAgra Foods chairman and chief executive officer, commented, "This transaction is another important piece of our ongoing agenda to improve the strength and consistency of our earnings by focusing on businesses with higher margin opportunities and low volatility. We have had a publicly stated objective to focus our resources on branded and value-added food products, and we are successfully executing toward this goal. Divesting our integrated chicken business complements other strategic actions we have taken recently, ranging from branded food acquisitions to divesting canned seafood, cheese, fresh beef, and fresh pork operations." With respect to the transaction, Rohde said, "We consider Pilgrim's Pride to be among the best in the business. The agreement we have reached gives us cash now, and also gives us the attractive opportunity to participate in Pilgrim's Pride's stock performance as the chicken cycle improves. Our companies were able to reach an agreement because of the mutual trust and respect that we have for each other. We know that our chicken business is being sold to an industry leader, and we think that the new Pilgrim's Pride will be a very capable company with strong performance, especially when the chicken cycle moves into better conditions." Fiscal 2003 & 2004 Impact The transaction will result in a pretax charge of approximately $112 million, or $.14 per share after tax, in ConAgra Foods' fiscal 2003 fourth quarter results. That charge is related to lowering the current book value of the chicken processing assets to reflect a new value for those assets as established by this transaction agreement, as well as transaction costs. ConAgra Foods does not expect the transaction to have a significant impact on its fiscal 2004 earnings. The company will comment on its overall fiscal 2004 outlook when it releases fiscal 2003 fourth quarter earnings results on June 26, 2003. Other Details o The transaction includes all of ConAgra Foods' fresh chicken business currently reported in the Meat Processing segment. Those businesses represent more than $2 billion of annualized revenue. This transaction does not include the Butterball brand or ConAgra Foods' prepared chicken products sold in retail channels under brands such as Banquet, Healthy Choice, and Marie Callender's. o For the quarters following the completion of the transaction, ConAgra Foods will no longer report current results for its Meat Processing reporting segment, as all of the operations previously reported in that segment will have been divested. o After the transaction, ConAgra Foods' fresh chicken requirements will be supplied at market terms by Pilgrim's Pride for use in ConAgra Foods' branded products such as Banquet, Healthy Choice, Marie Callender's, and others. o Within 12 months following the transaction, Pilgrim's Pride will register the notes payable to ConAgra Foods and the Class A shares held by ConAgra Foods for resale. ConAgra Foods will market the notes receivable from Pilgrim's Pride after they are registered for resale. After the Class A shares are registered for resale, ConAgra Foods expects to reduce its ownership level of Pilgrim's Pride over time. o The transaction closing is subject to approval by Pilgrim's Pride's shareholders and standard closing conditions. Shareholders representing a majority of Pilgrim's Pride's current shareholder votes have agreed to vote in favor of the transaction. Additional details regarding this transaction are posted in a question-and-answer document located on the company's Web site, www.conagrafoods.com, in the section for investors. ConAgra Foods, Inc. (NYSE: CAG) is one of North America's largest packaged food companies, serving consumer grocery as well as restaurant and foodservice establishments. Popular ConAgra Foods consumer brands include: Hunt's, Healthy Choice, Banquet, Armour, Louis Kemp, La Choy, Lunch Makers, Knott's Berry Farm, Wesson, Blue Bonnet, Kid Cuisine, Parkay, Reddi-wip, Marie Callender's, Cook's, Butterball, ACT II, Slim Jim, Eckrich, Chef Boyardee, Orville Redenbacher's, PAM, Snack Pack, Van Camp's, Peter Pan, Hebrew National, Gulden's, Pemmican, Swiss Miss, and many others. For more information, please visit us at www.conagrafoods.com. Note on Forward-Looking Statements: This news release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained in the forward-looking statements. The future performance of the Pilgrim's Pride business, future economic circumstances, industry conditions, company performance CONAGRA FOODS Page 4 and financial results, availability and prices of raw materials, product pricing, competitive environment and related market conditions, operating efficiencies, access to capital, actions of governments and regulatory factors affecting the company's businesses and other risks described in the company's reports filed with the Securities and Exchange Commission are examples of factors, among others, that could cause actual results to differ materially from those described in the forward-looking statements. The company is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise. EX-99.2 4 qanda.txt Q&A: Chicken Announcement June 9, 2003 1. Why is ConAgra Foods selling this business? Selling the chicken business fits with our goal of improving our portfolio by focusing on branded and value-added food items. Recent strategic actions toward this goal have included divesting our fresh beef and pork business (September 2002), divesting our canned seafood business (May 2003), and divesting significant cheese operations over the last 24 months (most recently blue cheese and cream cheese in May 2003). The transaction announced today includes all of ConAgra Foods' chicken processing business currently reported in the Meat Processing segment, such as its growing and slaughter operations, its Pierce foodservice business, and its PFS distribution business. 2. Will ConAgra Foods have a seat on the Pilgrim's Pride board of directors? No. 3. Why did ConAgra Foods structure the deal the way it did? With this structure, we accomplish our goal of divesting the business in a manner that generates cash for us to use in other ways. In addition, we have confidence in Pilgrim's Pride, and we anticipate the sale of that stock at a gain in the future for the benefit of our shareholders. The poultry cycle is currently at a relative low point, and the current price of the Class A shares being received is less than the book value of the shares. Consequently, we believe the opportunity for share price appreciation exists. 4. What is the year-to-date operating profit of the business being sold, as reported externally? Fiscal 2003 operating profit, through the third quarter: $11 million Fiscal 2002 operating profit, entire fiscal year: $83 million 5. What is the annual depreciation expense for the business being sold? Approximately $60 million. 6. What is the agreement regarding ConAgra Foods' sale of the Pilgrim's Pride Class A shares received in the transaction? After a year following the transaction, ConAgra Foods may dispose of up to 1/3 of the shares in any given year; however, ConAgra Foods may dispose of more than this in any given year through mutual agreement with the Pilgrim's Pride board. After the Class A shares are registered for resale, ConAgra Foods expects to reduce its ownership level of Pilgrim's Pride over time, based on market conditions. The registration for resale is expected to occur within 1 year from the closing of the transaction. 7. What is the agreement regarding ConAgra Foods' sale of the subordinated notes receivable from Pilgrim's Pride? ConAgra Foods expects to sell the notes after they are registered by Pilgrim's Pride for resale. The registration for resale is expected to occur within 1 year from the closing of the transaction. ConAgra Foods followed a similar strategy in the recent fresh beef and pork transaction - ConAgra Foods sold most of the high-yield debt (receivable from the buyer) shortly after that debt was eligible for resale. 8. Will ConAgra Foods account for the Class A Pilgrim's Pride shares using equity method accounting? No. Any portion of the shares which are eligible for resale within 1 year will be accounted for as securities held for resale. When the eligibility for resale is greater than 1 year away, they will be accounted for using the cost method of accounting. 9. Why is ConAgra Foods taking a charge in its fiscal fourth quarter 2003 relating to this transaction? Accounting rules regarding the valuation of assets require us to take the charge to reflect the new value of the business as established by this agreement. 10. What are the major items that need to be completed before the deal is closed? Regulatory approval and Pilgrim's Pride's shareholder approval. Pilgrim's Pride shareholders representing more than 50% of the votes have agreed to vote in favor of the transaction. 11. Where is the chicken business currently reported in ConAgra Foods' financial results? In the Meat Processing reporting segment. 12. In this transaction, is ConAgra Foods selling any business currently reported in the Packaged Foods reporting segment? No. 13. Who advised the parties on the deal? Pilgrim's Pride was advised by Credit Suisse First Boston. ConAgra Foods was advised by Gleacher and Co. 14. What details are available regarding the final number of Class A shares that may be issued by Pilgrim's Pride to ConAgra Foods? The number of shares issued will depend on a number of factors as described in the agreement. The objective is for the Pilgrim's Pride Class A stock to represent 45% of the total purchase price, subject to a maximum of 39.4 million shares. Because several factors may influence the number of shares actually issued by Pilgrim's Pride to ConAgra Foods, the components of the purchase price represented by Pilgrim's Pride debt and equity may differ from the amounts cited in today's release. Details regarding these and other matters, including termination rights, are contained in the agreement filed with the Pilgrim's Pride 8-K. ConAgra Foods is receiving Pilgrim's Pride Class A shares that will represent approximately 7% of Pilgrim's Pride's total outstanding votes after the close of the transaction, and approximately 49% of the Pilgrim's Pride's total equity. 15. What are the details regarding the notes payable by Pilgrim's Pride to ConAgra Foods? The notes payable by Pilgrim's Pride to ConAgra Foods are due in March of 2011. The annual interest rate is 10.5%, and interest will be paid in cash semi-annually. -----END PRIVACY-ENHANCED MESSAGE-----