NEW YORK (AP) -- Hillshire Brands says it will hold separate talks with Pilgrim's Pride and Tyson Foods, as the two meat processing heavyweights engage in a bidding war for the maker of Jimmy Dean sausages and Ball Park hot dogs.
The announcement by Hillshire comes a day after Pilgrim's Pride raised its bid to $55 per share, or $6.8 billion, from $45 per share. That tops Tyson's offer of $50 per share, or $6.2 billion, made last week.
Those values are based on Hillshire's 123 million shares outstanding. Pilgrim's Pride puts the total value of its new bid at $7.7 billion. Tyson Foods values its proposal at $6.8 billion, including debt.
The takeover bids by Pilgrim's Pride and Tyson Foods are being driven by the desirability of brand-name, convenience products like Jimmy Dean breakfast sandwiches. Those types of products are more profitable than fresh meat, such as chicken breasts, where there isn't as much wiggle room to pad prices.
While Pilgrim's Pride and Tyson both sell such products, their businesses have been more focused on supplying supermarkets and restaurant chains.
Both offers are contingent on Hillshire abandoning its plan to acquire Pinnacle Foods Inc., which makes Birds Eye frozen vegetables and Wish-Bone salad dressings. Some investors had questioned the wisdom of that deal, given the outdated image of some of Pinnacle's brands and the differences in the two companies' product portfolios.
In its statement issued Tuesday, Hillshire noted that it can't just scrap its deal with Pinnacle. But a term in Hillshire's deal with Pinnacle allows it to consider alternative proposals that would be superior for stockholders.
Pilgrim's Pride has said it would pay the $163 million breakup fee to call off the deal between Hillshire and Pinnacle.
Hillshire, based in Chicago, had been trying to diversify its own portfolio by moving into other areas of the supermarket with the $4.23 billion acquisition of Pinnacle.
Based in Greeley, Colorado, Pilgrim's Pride Corp. is owned by Brazilian meat giant JBS. Tyson Foods Inc., the biggest U.S. meat processor, is based in Springdale, Arkansas.
Shares of Hillshire Brands rose $4.93, or 9.2 percent, to $58.50 before the market open.
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