DOW JONES NEWSWIRES
Smithfield Foods Inc. (SFD) said Paul Fribourg is resigning from
the pork producer's board because he objects to the company's plans
to sell $250 million in stock to strengthen its balance sheet and
perhaps retire debt.
Shares were down 3.8% at $13.76 in recent trading. The company's
market value as of Monday's close was about $2 billion and the
stock has lost one-third of its value in the past year.
Fribourg, who is chairman and chief executive of Continental
Grain Co., has an 8.8% stake in Smithfield Foods. He has been on
Smithfield's board since 2007. Also, Michael Zimmerman, Continental
Grain's chief financial officer, resigned as an advisory
director.
Smithfield said Tuesday that Fribourg advised the company he
doesn't "believe an offering of this magnitude is necessary at this
time." The planned sale was announced late Monday.
Smithfield, the largest U.S. pork-products producer, has posted
losses in four of the past five quarters because of high feed costs
and lower demand. One reason for the drop in demand is the sector's
association with the H1N1 virus.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
tess.stynes@dowjones.com