Smithfield asks shareholders to approve acquisition by Shuanghui

Smithfield Foods Inc. on Monday reaffirmed its recommendation that its shareholders approve the takeover by Chinese meat producer Shuanghui, responding to an objection to the buyout from a major shareholder.

"Smithfield Foods confirmed that it received a letter from Starboard Value LP this morning and will review it," Smithfield, the world's largest pork processor, said in a statement.

Last month Shuanghui International Holdings Limited announced the acquisition of Smithfield for approximately 7.1 billion U.S. dollars, including debts, or 34 dollars per share.

However, investment group Starboard Value, which holds a 5.7-percent stake in Smithfield, said a piece-by-piece sale would be worth between 9 billion and 10.8 billion dollars after tax, or approximately 44 dollars to 55 dollars per share.

Smithfield reiterated in the statement that the merger provides Smithfield shareholders with "significant, immediate and certain cash value for their investment."

Smithfield's board of directors is "pleased with the outcome of the process it followed leading to this transaction, including the consideration of several different separation scenarios," it said.

"The board unanimously believes that the transaction with Shuanghui is in the best interests of the company, its shareholders and all Smithfield stakeholders," it said.

Shuanghui's purchase price represented a premium of approximately 31 percent over Smithfield's closing stock price on May 28, the last trading day prior to the announcement of the transaction.

Smithfield shares inched up in the morning trading session Tuesday after posting a slightly rally on Monday.