Investing.com – Shares of Sanderson Farms (NASDAQ:) were up 7% in Tuesday’s premarket on reports the poultry giant is exploring a sale.
Sanderson has tapped Centerview Partners for advice on the potential sale and has attracted interest from suitors including agricultural investment firm Continental Grain, according to The Wall Street Journal report.
Mississippi-based Sanderson is the third-biggest U.S. chicken producer by processing capacity. Continental owns a smaller chicken processor.
The target company had a market value of $3.72 billion as of Monday’s close of $166.58 per share.
Demand for food items, including chicken breasts and wings, has increased as pandemic restrictions lift and restaurants reopen, boosting sales and prices. The cost of boneless, skinless chicken breast has more than doubled since the beginning of the year and wing prices have hit records, according to the WSJ report.
For the second quarter ended April 30, Sanderson’s net sales were $1.13 billion compared with $844.7 million for the same period a year ago. Net income was $96.9 million, or $4.34 per share, compared with net income of $6.1 million, or $0.28 per share for the second quarter of fiscal 2020.
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