SMITHFIELD, Va.—Pork producer Smithfield Foods Inc. said Monday it plans to offer $350 million in convertible senior notes due 2013 to the public.
Subject to certain conditions, the notes will be convertible into cash or a combination of cash and Smithfield's common stock. The interest rate, conversion rate, offering price and other terms are to be determined.
Smithfield expects to use some of the proceeds from the offering to fund planned convertible note hedge and warrant transactions. Smithfield also expects to use the proceeds to repay debt.
The convertible note hedge transactions are expected to reduce the potential dilution to Smithfield's common stock upon conversion of the convertible notes. Smithfield noted, however, that the warrant transactions could separately have a dilutive effect.
Citi, Goldman Sachs and JPMorgan are underwriting the offering.
Smithfield plans to give the underwriters an option to buy up to $50 million in additional convertible notes to cover any overallotments.
