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Chicken producer Sanderson exploring sale, Dow Jones says

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Joe Sanderson, the CEO, has said he’d be the last member of the family to run the company.

By Kim Chipman and Michael Hirtzer

Sanderson Farms Inc., the U.S.’s third-biggest chicken producer, is exploring a sale, Dow Jones reported, citing people familiar with the matter.

The company has hired Centerview Partners to give advice about a sale, and potential buyers include Continental Grain Co., according to Dow Jones.

Chief Financial Officer Mike Cockrell declined to comment, citing company policy on not responding to market speculation. Centerview and Continental Grain, which owns Wayne Farms LLC, the sixth-biggest U.S. chicken producer, didn’t immediately respond to requests for comment.

Sanderson Farms has benefited from soaring prices of chicken breasts and jumbo wings as restaurants reopen and food-service outlets restock. The company reported better-than-expected profit and sales as a result, despite higher costs for animal feed. Sanderson last month said the surge in prices for building materials like lumber has led it to delay construction on a new poultry-processing plant.

The chicken company also has been grappling with a tight labor market at a time when demand for the meat is rapidly rebounding.

Shares for the Laurel, Mississippi-based company were at $181.41 as of 5:08 p.m. after regular trading hours, up 8.9% from Monday’s close. Its market capitalization was around $3.72 billion.

Joe Sanderson, the CEO, has said he’d be the last member of the family to run the company, with his daughters uninterested in doing so. However, executives have expressed concerns in the past about being undervalued while prices for chicken have risen to record highs. The company in October said it rejected an unsolicited bid from Durational Capital Management.

--With assistance from Daniela Sirtori-Cortina.
© 2021 Bloomberg L.P.
TAGS: Business
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