One of the biggest shareholders in Smithfield Foods Inc has formally recommended to the board to split America's largest hog producer into three separate distinct units. The shareholder, Continental Grain Co, urged the board to also initiate a regular cash dividend.
The letter to the SEC said, "There should be regular dividends along the lines of what competitors like Hormel or Tyson pay, which would encourage a more stable shareholder base, while returning capital to shareholders."
The letter further noted that when the current company board took over in 2006, the company's stock value has declined by at least 26% including dividend values. According to the shareholder, this was low compared to the 70% return by Tyson and 131% return by Hormel.
The shareholder further added that it was willing to meet with the board of Smithfield and its management to further discuss plans for the company.
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