Starboard Pushes for Alternative Smithfield Deal

Starboard Value LP, the activist hedge fund that owns a big stake in Smithfield Foods Inc. (SFD), is hiring advisers to help press its case for a different deal for the pork producer than one already agreed to with China's Shuanghui International Holdings Ltd., according to people familiar with the matter.

Smithfield agreed in May to be bought by Shuanghui for $34 a share, or $4.7 billion, in what would be the biggest Chinese takeover of a U.S. company if it is completed.

Last month, Starboard announced it had taken a 5.7% stake in Smithfield, the world's largest hog farmer and pork processor. Starboard argued then that Smithfield, based in the Virginia town of the same name, would be worth more if it were broken up into three parts--U.S. pork production, hog farming and international sales of fresh and packaged meats--and then sold.

Starboard has hired merger-advisory firms Moelis & Co. and Business Development Asia, or BDA, to help with its effort to get a better deal for Smithfield shareholders. The firms will be tasked with trying to find buyers for the pieces of the company, the people said.

Smithfield shares closed Friday unchanged at $32.91 on the New York Stock Exchange.

Write to Dana Cimilluca at [e-mail] and Sharon Terlep at [e-mail]

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