Monday, August 9, 2010

Menu Foods to be acquired by U.S. Pet food company

TORONTO -- Toronto-based Menu Foods Income Fund, infamous for a widespread tainted pet food recall in 2007 after cats and dogs died from melamine poisoning, has agreed to sell itself to Arkansas-based Simmons Pet Food Inc. in a deal worth $239-million.
The deal, subject to unitholder approval, would see Simmons acquire the fund and assume its existing debt. After disposition of Menu's assets, the fund's units will be redeemed for $4.80 each in cash.
This is a 65.5% premium on the March 15 closing price of $2.90, when the fund said it would undertake a strategic review, and a 46.8% premium on its closing price of $3.27 on Aug. 6, Simmons said in a release.
Simmons expects the deal to close in the fourth quarter of 2010.
"With this transaction, we are adding one of North America's leading private label pet food manufacturers to our portfolio and further strengthening our company," Mark Simmons, chairman of parent Simmons Pet Foods Inc., said in a release.
Menu Foods never recovered after it had to recall 60 million cans of pet food across North America in 2007. The food, imported from China and suspected to contain melamine, killed at least 14 pets due to kidney failure.
The company estimated the recall cost about $55-million.
Financial Post

Read more:

No comments:

Post a Comment