Good news follows bad in Tyson/IBP deal
Uncertainty continues to surround Tyson Food’s $3.2bn cash bid for North America’s largest meat packer, IBP, after Tyson said it expected only to break even in the second quarter.
Tyson, the world’s largest poultry producer, attributed the shortfall to a range of variables: including severe winter weather conditions, higher energy and grain costs and "weaker-than-expected pricing." Having previously anticipated earnings per share in the 6-10 cents range, the company said it now expected earnings to be "at or near break-even" in the three months to the end of March 2001.
The news coincided with the release of IBP’s own fourth-quarter and year-end results, bringing to an end the financial review undertaken after the US Securities and Exchange Commission (SEC), which had itself cast a shadow over Tyson bid.
In the statement, IBP said it recorded a fourth-quarter impairment charge of $44.9 million in relation to its purchase last year of the Chicago hor d’ouvres producer DFG, which led to its SEC-related problems. IBP had previously said the charge could be as high as $108m.
