(Bloomberg) -- George’s Inc. -- a family-owned chicken producer based in Springdale, Arkansas -- is among five firms that presented binding offers to acquire Keystone Foods LLC assets, said two people with direct knowledge of the matter.
Keystone, a U.S. supplier of chicken nuggets to McDonald’s Corp., has also attracted bids from Tyson Foods Inc., Cargill Inc., China’s Cofco Ltd. and an unidentified Japanese firm, the people said, asking not to be named because the discussions are private. Meat producer Marfrig Global Foods SA, Keystone’s owner, is studying the offers now and should conclude the process shortly, the people said. In May, Bloomberg reported the companies were among those selected by the Brazilian firm to continue in the bidding process.
Marfrig, Cargill, Tyson declined to comment. Cofco’s press office didn’t respond to a request for comment sent outside of regular business hours. George’s did not provide an immediate response to voicemail messages seeking comment on its potential interest in acquiring Keystone.
George’s Inc. is closely held with facilities in four U.S. states and also offers pre-packaged foods. In November, the company acquired Campos Foods LLC, which makes cooked meat products, with an 85,000-square-foot plant in Tennessee, Arkansas Business reported.
Marfrig is seeking to raise more than $3 billion from the sale, people said in May. The company, controlled by Marcos Molina dos Santos, might also consider selling Keystone’s U.S. and Asian operations separately, a person said at the time. Marfrig hired JPMorgan Chase & Co. to find a single buyer and would still prefer that outcome, the person said.
Marfrig rose 6.2 percent in Sao Paulo, the biggest gain among companies in Brazil’s Ibovespa benchmark index. Earlier, the shares climbed as much as 7.2 percent.
In May, Marfrig said it had selected five bidders for the sale’s next phase, which included visits to factories in the U.S. and Asia and the submission of a binding offer in June.
Keystone, which in 2017 had revenue of $2.8 billion, has operations in seven U.S. states as well as in South Korea, China, Malaysia, Thailand and Australia. While its American assets account for almost 70 percent of sales, the food-service company has experienced stronger growth from its Asian arm.
Cofco has close ties to Keystone. It has held a 15 percent stake in one of Keystone’s four units in China for 25 years, according to Marfrig. And in 2011, Cofco formed a joint venture with Keystone as part of an effort to invest in food-distribution centers in China, although the plan was never implemented.
Marfrig said in April it would use some of the proceeds from the Keystone sale to pay for its $969 million acquisition of a controlling stake in National Beef Packing Co., the fourth-largest American beef-packing company. The rest of the cash will be used to pay down debt, which should slash the Brazilian meatpacker’s leverage.
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