US chicken producer Pilgrim's Pride has announced a bid to acquire frozen-foods company Hillshire Brands in a deal worth $US6.4 billion ($A6.92 billion).
Pilgrim's offer would require Hillshire to abandon its own $US6.6 billion deal announced May 12 to acquire Pinnacle Foods, which owns the Duncan Hines and Mrs Butterworth's brands.
Pilgrim's said on Tuesday the deal with Hillshire, which markets sausage and other prepared meats under the Hillshire Farm logo, was "substantially superior" to the pending Hillshire-Pinnacle deal and would combine strong marketing and operational advantages.
"We believe that together Pilgrim's and Hillshire will better serve our combined customer bases for the benefit of all our stakeholders," said Bill Lovett, chief executive of Pilgrim's Pride.
"We look forward to working constructively with Hillshire to sign a definitive merger agreement and quickly realise the benefits of this combination."
Pilgrim's said its offer of $45 per share for Hillshire amounted to a 25 per cent premium over the average trading price of Hillshire in the 10 days prior to its bid for Pinnacle.
Pilgrim's Pride said it would pay a $US163 million termination fee to end the deal between Hillshire and Pinnacle.
In early trade, Hillshire jumped 20.9 per cent to $44.77, Pilgrim's Pride rose 4.4 per cent to $26.20, and Pinnacle fell 7.0 per cent to $30.94.
