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Shareholder Says Smithfield Should Break Up Company


March 8, 2013 (The Virginian-Pilot, Norfolk, Va.) A major shareholder told Smithfield Foods Inc. in a letter Thursday that it should split into three independent companies, offer regular cash dividends and review executive compensation.



"It's time for Smithfield to get serious about creating shareholder value," said the letter from Continental Grain Co., which owns a 6 percent share of Smithfield stock.

Continental's letter said Smithfield should break up into three businesses -- hog production; fresh pork and packaged meats, and international operations. The letter was released in a filing Thursday with the U.S. Securities and Exchange Commission.

The letter also said: "Compensation should be tied to shareholder value creation. There is clearly a disconnect in the current compensation plans."

Smithfield said in a news release Friday that it had received the letter from Continental Grain. "Smithfield's board of directors, in consultation with its financial and legal advisers, will review it in due course," the release said.

Smithfield announced Thursday that income rose to $81.5 million, or 58 cents per share, in the third quarter of its fiscal year. But it also reported a $64.5 million loss in hog production.

The company's shares closed at $24.68 each Thursday on the New York Stock Exchange. That was the highest level since December 2011.

Continental Grain's letter said, however, that "since the current management took over on August 31st, 2006 and through March 1, 2013, Smithfield stock has declined by 26 percent."

2013 The Virginian-Pilot (Norfolk, Va.)

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