-----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, Qf/xv/VSLDrqqlMT4nhgjm5BJPo1CEYcnRy7zUU9H16JLXzhQlRMU5fOLi5hbx7C JiTjg/z8Cal/5inpsU1PdQ== 0000912057-01-000068.txt : 20010122 0000912057-01-000068.hdr.sgml : 20010122 ACCESSION NUMBER: 0000912057-01-000068 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20010102 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: IBP INC CENTRAL INDEX KEY: 0000052477 STANDARD INDUSTRIAL CLASSIFICATION: MEAT PACKING PLANTS [2011] IRS NUMBER: 420838666 STATE OF INCORPORATION: DE FISCAL YEAR END: 1226 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-06183 FILM NUMBER: 1500789 BUSINESS ADDRESS: STREET 1: IBP AVE STREET 2: P O BOX 515 CITY: DAKOTA CITY STATE: NE ZIP: 68731 BUSINESS PHONE: 4024942061 MAIL ADDRESS: STREET 1: IBP AVE STREET 2: P O BOX 515 CITY: DAKOTA CITY STATE: NE ZIP: 68731 FORMER COMPANY: FORMER CONFORMED NAME: IOWA BEEF PROCESSORS INC /PRED/ DATE OF NAME CHANGE: 19821109 FORMER COMPANY: FORMER CONFORMED NAME: IOWA BEEF PACKERS INC DATE OF NAME CHANGE: 19701130 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SMITHFIELD FOODS INC CENTRAL INDEX KEY: 0000091388 STANDARD INDUSTRIAL CLASSIFICATION: MEAT PACKING PLANTS [2011] IRS NUMBER: 520845861 STATE OF INCORPORATION: VA FISCAL YEAR END: 0427 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 200 COMMERCE STREET STREET 2: 999 WATERSIDE DRIVE CITY: SMITHFIELD STATE: VA ZIP: 23430 BUSINESS PHONE: 7573653000 MAIL ADDRESS: STREET 1: 900 DOMINION TOWER STREET 2: 999 WATERSIDE DRIVE CITY: NORFOLK STATE: VA ZIP: 23510 FORMER COMPANY: FORMER CONFORMED NAME: LIBERTY EQUITIES CORP DATE OF NAME CHANGE: 19710221 FORMER COMPANY: FORMER CONFORMED NAME: LIBERTY REAL ESTATE TRUST DATE OF NAME CHANGE: 19661113 SC 13D/A 1 a2034390zsc13da.txt SCHEDULE 13D/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 SCHEDULE 13D/A INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (AMENDMENT NO. 3) IBP, INC. --------------------------------------------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $0.05 PER SHARE --------------------------------------------------------- (Title of Class of Securities) 449223106 --------------------------------------------------------- (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 --------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) JANUARY 1, 2001 --------------------------------------------------------- (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 |_|. - ------------------------------------------------------------------------------- 1. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): Smithfield Foods, Inc. 52-0845861 - ------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) |_| (b) |_| - ------------------------------------------------------------------------------- 3. SEC USE ONLY: - ------------------------------------------------------------------------------- 4. SOURCE OF FUNDS: WC - ------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - ------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION: Virginia - ------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES 6,714,341 BENEFI- --------------------------------------------------------------- CIALLY 8. SHARED VOTING POWER OWNED BY 250,000(1) EACH --------------------------------------------------------------- REPORTING 9. SOLE DISPOSITIVE POWER PERSON 6,714,341 WITH --------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 0 - ------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 6,964,341(1) - ------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: |_| - ------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): - ---------- (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. 6.6%(1) - ------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON: CO - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 1. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): SF Investments, Inc. 51-0326024 - ------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) |_| (b) |_| - ------------------------------------------------------------------------------- 3. SEC USE ONLY: - ------------------------------------------------------------------------------- 4. SOURCE OF FUNDS: AF - ------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - ------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION: Delaware - ------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES N/A BENEFI- --------------------------------------------------------------- CIALLY 8. SHARED VOTING POWER OWNED BY N/A EACH --------------------------------------------------------------- REPORTING 9. SOLE DISPOSITIVE POWER PERSON N/A WITH --------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER N/A - ------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 6,714,241 - ------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: |_| - ------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 6.4% - ------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON: CO - ------------------------------------------------------------------------------- This Amendment No. 3 ("Amendment No. 3") amends the statement of beneficial ownership on Schedule 13D filed on November 13, 2000, and amended by Amendment No. 1 thereto filed on November 17, 2000 and further amended by Amendment No. 2 thereto filed on December 20, 2000 (as amended, the "Schedule 13D") by and on behalf of Smithfield Foods, Inc., a Virginia corporation ("Smithfield"), and SF Investments, Inc., a Delaware corporation ("SF Investments" and together with Smithfield, the "Reporting Persons"), with respect to the common stock, par value $0.05 per share ("Common Stock"), of IBP, Inc., a Delaware corporation ("IBP"). Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Schedule 13D. Item 4. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 4 of Schedule 13D is amended and supplemented as follows: After the close of business on December 29, 2000, in response to an invitation from the Special Committee of the Board of Directors of IBP (the "Special Committee"), Smithfield delivered a revised proposal to the Special Committee which provided for the acquisition of the Common Stock of IBP for a price of $30 per share in Smithfield common stock. A copy of the letter to the Special Committee is attached hereto as Exhibit 1 and incorporated by reference herein. On December 30, 2000, Smithfield and its advisors engaged in discussions with the Special Committee and its advisors. On Sunday, December 31, 2000, Smithfield delivered a revised proposal to the Special Committee which increased the price per share of Common Stock to $32 per share in Smithfield common stock, subject to a maximum exchange ratio of 1.138 shares of Smithfield common stock and a minimum exchange ratio of .965 shares of Smithfield common stock. This revised proposal also provided that it would expire at 12:00 noon on Monday, January 1, 2001. In the afternoon of January 1, 2001, IBP announced that it had entered into a definitive agreement with Tyson Foods, Inc. pursuant to which Tyson Foods would acquire all of the outstanding shares of Common Stock of IBP at a price of $30.00 per share. Later on January 1, 2001, Smithfield issued the press release attached hereto as Exhibit 2 which is incorporated by reference herein. Item 7. Material to be Filed as Exhibits. EXHIBIT DESCRIPTION ------- ----------- 1. Letter to the Special Committee dated December 29, 2000. 2. Press release of Smithfield dated January 1, 2001. 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: January 2, 2001 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: January 2, 2001 EX-99.1 2 a2034390zex-99_1.txt EXHIBIT 99.1 Exhibit 1 December 29, 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, Smithfield Foods, Inc. has devoted a substantial amount of time over the past two months since we made our proposal, continuing to evaluate IBP, inc. and the prospects for a combination of our two companies. After completing this evaluation we are pleased to inform you that our board of directors has authorized us to increase our offer for each share of IBP by 20% to $30, 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 1.051 Smithfield shares and a minimum exchange ratio of .905 Smithfield shares per IBP share. This offer will remain open until 6:00 p.m. Eastern Time on Saturday, December 30, 2000 at which time it will expire by its own terms and is conditioned on your and IBP's management's not disclosing any details of this offer to any third party, including Tyson, Rawhide Holdings or its Affiliates (which we understand has waived its review and delay rights as described below) or the media. We are also submitting this offer in reliance on your assurances that since this proposal constitutes a "Superior Proposal" within the meaning of the Rawhide Merger Agreement, Rawhide Holdings has agreed to waive its rights to have disclosed to it the terms of our proposal or this letter and has agreed to waive the requirement that IBP provide three business days advance notice prior to terminating the Rawhide Agreement. As indicated in our earlier proposal, our proposed transaction would be tax-free for your stockholders and would be accounted for as a pooling of interests. As in our previous offer, 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 revised offer is clearly superior to the revised Tyson proposal. It represents an 11% premium over the nominal value of such proposal. As such, we believe that our proposal delivers greater value to your stockholders, who would collectively hold a majority of the combined IBP-Smithfield and would enjoy full voting rights with respect to such ownership. As we have stated before, a combined Smithfield-IBP would be able to take advantage of each company's best practices in order to permit the merged company to improve both its beef and pork operations, realize synergies and build a stronger pork and beef producer for the benefit of all of our respective stockholders and other constituents including independent farmers. By contrast, Tyson has never effectively operated outside of the chicken business and does not have any successful experience in the beef and pork industries, particularly in a challenging economic cycle. Tyson's prior forays into areas other than chicken have generally been viewed by the investment community as failures. In addition, Smithfield has a strong track record of building stockholder value that is evidenced by the 91% return to its stockholders that Smithfield has generated over the past five years. Under our proposal, IBP stockholders would be able to share the benefit of Smithfield's stockholder-focused management through their ownership of the combined company. By contrast, Tyson has delivered a negative 27% return for its stockholders for the same period. It is critical to note that one half of the consideration Tyson has offered the IBP stockholders consists of shares of Tyson's "low vote" Class A Common Stock, which shares would be effectively disenfranchised in a combined Tyson-IBP due to the Tyson family's ownership of supervoting shares. Because of this supervoting share structure, which entitles the Tyson family to exercise unchallenged control over the company, Tyson's management is not accountable to its public stockholders even though it has meaningfully diminished stockholder value over the past five years. Therefore, under the Tyson proposal, the stock consideration to be received by the IBP stockholders would be shares in a company with an underperforming management, not accountable to its stockholders, and no successful track record in the beef and pork industries. In addition, our proposal would be tax-free to all of the IBP stockholders while under the Tyson proposal, stockholders would have to pay taxes on their gain in the transaction to the extent such gain was less than or equal to the cash received. Furthermore, we note from Tyson's public filings that it is continuing its program to buy its stock on the open market which, taken together with the recent tendency of Tyson's stock to go down during the day and recover somewhat at the end of the day, raises concerns that Tyson's stock price might be lower in the absence of the Tyson buying activity. By contrast, we have not been in the market acquiring Smithfield stock at any time during this process. Based on what we have seen during our due diligence, we believe that $250 million of synergies per year by the third year after the transaction is an appropriate estimate of the amount of synergies that could be realized after our respective businesses have been integrated. The increase in our synergy estimates from those outlined in our initial proposal results in part from synergies identified during our due diligence in the transportation and logistics area. After giving effect to such synergies, and based on the most recent set of IBP management projections provided to us, as adjusted to reflect our due diligence conclusions, and based on public analysts consensus forecasts for Smithfield, we would expect that our transaction would be accretive in the first year and increasingly accretive thereafter. During the due diligence process we have been impressed by IBP's management and look forward to working together with them in a combined Smithfield-IBP. As we have stated before, 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 are excited about the prospect of integrating IBP's and Smithfield's management teams in a manner that would create the strongest possible combined company. We believe that a Smithfield/IBP combined management team would be a far stronger team than in any combination with Tyson, particularly if economic or industry conditions were to become more challenging. Also, as stated in our prior offer, we do not anticipate any significant reduction in employment levels in IBP after the merger. We are willing to discuss appropriate enhancements to IBP's continuity programs to give employees and management greater comfort and incentive to remain focused during the period between signing and closing. As we indicated in our initial offer, we would also like to discuss with you the possibility of offering some of IBP's directors who may be interested the opportunity to join our board of directors after the merger. We include with this letter a signed merger agreement which reflects many of your counsel's comments. We would be prepared to have you accept this agreement in its current form, subject to finalization of mutually agreed schedules and certain other matters referenced in the merger agreement, until the deadline referred to above and we believe that we can reach agreement on any remaining open issues very rapidly. We believe that, notwithstanding Tyson's assertions to the contrary, the general "sealed bid" process outlined in J.P. Morgan's letter of December 21, 2000 is entirely appropriate. While Tyson tries to hide behind allegations of changing "the rules in the middle of the process" and its characterization of a sealed bid process as one that is "behind closed doors", we take it as evidence of Tyson's unwillingness to put its best bid on the table and possibly a reaction to its surprise at its misjudgment of the likelihood of receiving a second request. Companies for years have run sealed bid auction processes and found that such processes are the best way to generate stockholder value and we applaud the special committee for its open and honest exercise of its duties to the stockholders of IBP. We also wish to point out that Tyson mischaracterized the trading pattern of Smithfield's stock in its letter to the special committee when it asserted that Smithfield's stock was trading below the collar of our first offer as long as the market saw Smithfield as the only bidder. In fact, after arbitrage selling pressure caused our stock price initially to fall below the collar in the period after our first offer, our stock recovered and closed at $28.56, above the low end of our original collar, on December 1, 2000, three days prior to the announcement of the original Tyson offer. As you know, we and our advisors have analyzed and discussed with your advisors the steps necessary to secure regulatory approval of the combination of our two companies. We remain confident, and believe that your advisors agree with our assessment, that the plan that we have proposed to deal with concentration issues raised by our combination will permit us to gain antitrust approval. Given our proactive approach to the divestitures that we have extensively discussed with you and that are consistent with the Federal Trade Commission and Department of Justice Merger Guidelines, we continue to believe that the transaction can be consummated within four months. We are confident that the contemplated divestitures will not have a negative impact on the combined company's financial performance and any potential effects of such divestitures have been included in our analysis. In this connection, we have already scheduled a meeting at their request with the Department of Justice on January 3, 2001 and we have already gathered for presentation substantially all of the data and documents we believe would be required by the Department of Justice. At this meeting, in order to jump start the process, we would provide this information and outline our proactive divestiture plan. We would be pleased if your advisors would accompany us to that meeting. We note that Tyson has received a second request under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with respect to its proposal (even though Tyson had constantly asserted since making its initial proposal that its proposal was not expected to face antitrust issues or delay). Tyson's proposal could therefore require a similar period of time to complete. We also call your attention to the fact that notwithstanding Tyson's purported willingness to take actions necessary to address the antitrust issues raised by its transaction, the fact that Tyson has not identified any ready remedy to the antitrust problems and issues that led to its receiving the second request continues to raise uncertainty about its timing and perhaps its ultimate ability to consummate the transaction. In addition, since the date of our first proposal we have devoted an enormous amount of effort to meeting with and understanding concerns of various constituencies and public officials in connection with our transaction. While we concede that the initial reaction of some of these groups and public officials was to raise concerns about the combination, we found in our discussions that they were unaware that our proactive divestiture plan would result in little, if any, additional concentration and that we, unlike Tyson, have publicly committed to no further vertical integration of pork or beef. We believe that the posture of these groups and public officials has now become more reasoned and open minded and in a number of cases, quite supportive. Following the execution of a definitive merger agreement we intend to continue, and even intensify, our meetings with these groups and public officials to ensure that such concerns do not delay the consummation of our transaction. We are very excited about the prospect of effecting the combination of our two companies for the benefit of all of our stockholders and other constituencies and having the opportunity to build a new and stronger company which can thrive in the years ahead. We and our advisors stand ready to meet with you promptly to move toward the announcement of a transaction between us. Sincerely, Joseph W. Luter, III EX-99.2 3 a2034390zex-99_2.txt EXHIBIT 99.2 Exhibit 2 SMITHFIELD FOODS NEWS FOR IMMEDIATE RELEASE SMITHFIELD COMMENTS ON TYSON-IBP MERGER ANNOUNCEMENT SMITHFIELD, VA, JANUARY 1, 2001 - Joseph W. Luter, III, Chairman and Chief Executive Officer of Smithfield Foods, Inc. (NYSE: SFD), today issued the following statement in response to the announcement by Tyson Foods that they have signed a definitive merger agreement to acquire IBP for $30 in cash and stock. "After conducting our due diligence process, we made an offer Friday afternoon, followed by an increased offer Sunday, to acquire all of the outstanding shares of IBP for $32 per share in a tax-free stock-for-stock combination. That offer expired at noon today under its own terms. We received no response to the increased offer from the IBP Special Committee. We believe that our offer was a full and fair price for the company, but given the additional synergies we identified during the due diligence process, it was within the bounds of our commitment to only do transactions that will be accretive and therefore, add value to our shareholders. With our track record of successfully integrating acquisitions and creating shareholder value, we believed then -- as we believe now -- that our proposal was the best proposal for IBP shareholders. We are confident that over the next 12 months and beyond the IBP shareholders will, in hindsight, conclude that our offer would have created superior value." With annual sales of $5.2 billion, Smithfield Foods is the leading producer and marketer of fresh pork and processed meats in the United States. Smithfield Foods has a proven track record of creating shareholder value and successfully closing and integrating acquisitions. Since 1990, the company has completed 11 acquisitions, all of which have been successfully integrated into the company's strategy and operations. The company was ranked the number one FORTUNE 500 food stock in total return to investors, and placed in the top 15th percentile in total return to investors among all FORTUNE 500 companies, over the past 10 years. For more information, please visit WWW.SMITHFIELDFOODS.COM. CONTACTS: FOR INVESTORS: FOR MEDIA: Jerry Hostetter Josh Pekarsky Smithfield Foods, Inc. Sarah Zitter-Milstein (212) 758-2100 Kekst and Company (212) 521-4800 THIS PRESS RELEASE MAY CONTAIN "FORWARD-LOOKING" INFORMATION WITHIN THE MEANING OF THE FEDERAL SECURITIES LAWS. THE FORWARD-LOOKING INFORMATION MAY INCLUDE STATEMENTS CONCERNING SMITHFIELD'S OR IBP'S OUTLOOK FOR THE FUTURE, THE ABILITY TO REALIZE ESTIMATED SYNERGIES, AS WELL AS OTHER STATEMENTS OF BELIEFS, FUTURE PLANS AND STRATEGIES OR ANTICIPATED EVENTS, AND SIMILAR EXPRESSIONS CONCERNING MATTERS THAT ARE NOT HISTORICAL FACTS. FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN, OR IMPLIED BY, THE STATEMENTS. THE FOLLOWING FACTORS, AMONG OTHERS, COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN, OR IMPLIED BY, THE STATEMENTS: THE RISKS THAT SMITHFIELD'S AND IBP'S BUSINESSES WILL NOT BE INTEGRATED SUCCESSFULLY, THE RISK THAT SMITHFIELD AND IBP WILL NOT REALIZE ESTIMATED SYNERGIES, COSTS RELATING TO THE PROPOSED TRANSACTION, THE AVAILABILITY AND PRICES OF LIVE HOGS, LIVE CATTLE, RAW MATERIALS AND SUPPLIES, PRODUCT PRICING, THE COMPETITIVE ENVIRONMENT AND RELATED MARKET CONDITIONS, OPERATING EFFICIENCIES, ACCESS TO CAPITAL, ACTIONS OF DOMESTIC AND FOREIGN GOVERNMENTS AND OTHER FACTORS DISCUSSED IN SMITHFIELD'S AND IBP'S RESPECTIVE FILINGS WITH THE SEC. More detailed information pertaining to Smithfield's proposal will be set forth in appropriate filings to be made with the SEC. We urge stockholders to read any relevant documents that may be filed with the SEC because they will contain important information. Stockholders will be able to obtain a free copy of any filings containing information about Smithfield and IBP, without charge, at the SEC's Internet site (HTTP://WWW.SEC.GOV). Copies of any filings containing information about Smithfield can also be obtained, without charge, by directing a request to Smithfield Foods, Inc., 200 Commerce Street, Smithfield, Virginia 23430, Attention: Office of the Corporate Secretary (757-365-3000). This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Smithfield 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 Smithfield. A detailed list of the names of Smithfield's directors and officers is contained in Smithfield's proxy statement for its 2000 annual meeting, which may be obtained without charge at the SEC's Internet site (HTTP://WWW.SEC.GOV). As of the date of this communication, none of the foregoing participants, other than Smithfield (which beneficially owns approximately 6.6% of IBP's common stock), individually beneficially owns in excess of 5% of IBP's common stock. Except as disclosed above and in Smithfield's proxy statement for its 2000 annual meeting and other documents filed with the SEC including Smithfield's Schedule 13D relating to the IBP common stock, to the knowledge of Smithfield, none of the directors or executive officers of Smithfield has any material interest, direct or indirect, by security holdings or otherwise, in Smithfield or IBP. # # # -----END PRIVACY-ENHANCED MESSAGE-----