Fitch: Hillshire view to evolving

Fitch Ratings said it revised the Rating Watch on the Hillshire Brands Co.'s ratings to evolving from negative.

The evolving watch follows unsolicited cash offers from Pilgrim's Pride Corp. and Tyson Foods, Inc. to acquire the Hillshire, Fitch said.

Hillshire has a long-term issuer default rating of BB, senior unsecured notes rating of BB, bank credit facility rating of BB, short-term issuer default rating of B and commercial-paper rating of B.

Pilgrim's proposed to acquire Hillshire for $45 per share or $6.4 billion, Fitch said, and Tyson's offered $50 per share or $6.8 billion, which effectively places the company in play.

The offers follow Hillshire's May 12 definitive agreement to acquire Pinnacle Foods, Inc. for $6.6 billion.

The Pilgrim's and Tyson offers are contingent upon Hillshire breaking its agreement with Pinnacle, Fitch said.

The offer prices include Hillshire's roughly $900 million of debt and a $163 million termination fee payable to Pinnacle, the agency added.

Fitch said it views Tyson's offer as superior, but expects Hillshire's board of directors to evaluate both proposals carefully.

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