It appears that investors are satisfied that the sale of its Mexican and Brazilian operations and the issuance of 24 million new Class A shares and 30 million tangible equity units are in the company’s — and its stockholders’ — best interests. The sale of the shares and equity units could raise at least $2 billion to help pay down the borrowing related to the acquisition of Hillshire Brands for around $8.6 billion earlier this year.
Tyson said it had commenced the sale of the Class A shares and that the underwriters have a 30-day overallotment option on an additional 3.6 million shares. Morgan Stanley and J.P. Morgan are acting as lead joint book-runners on the share offering and the tangible equity offering. The company will not grant an overallotment option on the tangible equity units.
Each tangible equity unit carries a stated amount of $50 and includes a prepaid stock purchase contract and a senior amortizing note due July 15, 2017.
The final item helping push up shares is the company’s forecast that earnings per share will rise at least 10% in 2015. That calculates out to about $3.20 per share, above the current consensus estimate of $3.16 a share.
Tyson stock traded up 2.4% at $40.49 in early afternoon trading, in a 52-week range of $26.97 to $44.24.
Top Gaining Stocks
Top Losing Stocks