SEC Comment Letter for SMITHFIELD FOODS INC (SFD) (CIK 0000091388) (SFD) — Jul 16, 2013
SMITHFIELD FOODS INC (SFD) (CIK 0000091388)
Date: July 16, 2013 · CIK: 0000091388 · Accession: 0000000000-13-038684
AI Filing Summary & Sentiment
Reasoning
Letter
July 15 , 2013 Via E -mail Robert W. Manly , IV Chief Financial Officer Smithfield Foods, Inc. 200 Commerce Street Smithfield, Virginia 23430
Re: Smithfield Foods, Inc. Preliminary Proxy Statement on Schedule 14A Filed June 18, 2013 File No. 001 -15321
Dear Mr. Manly :
We have reviewed your filing an d have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter within ten business days by amending your filing, by providing the requested information, or by advising us when you will provide the requested response. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.
After reviewing any amendment to your filing and the information you provide in response to these comments, we may have additional comments.
Summary Term Sheet, page 1
Solicitation of Proxies, page 3
1. We note that proxies may be solicited in person or by telephone, facsimile, electronic mail or other electronic medium. Please confirm that you will file all written soliciting materials, including any scripts to be used i n soliciting proxies by personal interview or telephone.
Robert W. Manly , IV Smithfield Foods, Inc. July 15 , 2013 Page 2
Interest of Smithfield Directors and Executive Officers in the Merger, page 5
2. Please revise in this section and on page 52 to disclose the amount of total compensation to potentially be received by your directors and executive officers in connection with the proposed merger.
Material U.S. Federal Tax Consequences of the Merger, page 7
3. Please revise here , on page 12, and in the entire section starting on page 68 that investors are encouraged to consult their own tax advisor s, rather than stating that they should consult their tax advisors.
Background of the Merger, page 27
4. We note the disclosure in the opening paragraph that from time to time, Smithfield and the Smithfield Board, reviewed and evaluated strategic opportunities and that one such opportunity is discussed in the second paragraph. T o the extent any other strategic alternatives were considered by your Board, such as other strategic partnerships, merger or acquisition transactions, please revise this se ction to discuss in greater detail if, or when, those alternatives were considered and for what reason those alternatives were not considered or pursued.
5. We also note the discussion in the third paragraph of page 28 regarding other possible transac tions with Shuanghui International Holdings Limited (“Parent ”) in the past. To the extent other strategic alternatives were considered with Parent , please revise to expand to include a brief discussion of those transactions considered, the time frame for when discussions started and why other strategic alternat ives were not ultimately considered or pursued.
Opinion of Smithfield’s Financial Advisor, page 41
6. Please provide us with copies of the “board books ” and any other material s prepared by your financial advisors. Such materials should include all presentations made by the financial advisors. Please also provide us with copies of the engagement letters.
Selected Comparable Company Analysis, page 43
7. Please tell us whether any additional companies that fit the criteria were not used, and, if not, why not. Similarly, please tell us whether any additional transactions that fit the criteria for the selected transaction analysis were not use d, and, if so, why not.
Robert W. Manly , IV Smithfield Foods, Inc. July 15 , 2013 Page 3
Selected Precedent Tran saction Analysis , page 44
8. We note that six of eight of the precedent transactions were announced over five years ago. Please briefly explain how these transactions are useful to this analysis in light of their age and disclose whether there is any limit ation in comparability because of the passage of time.
Certain Financial Projections, page 48
9. Include a brief discussion of the underlying assumptions and limitations of the projections provided .
Interests of Smithfield Directors and Executive Officers in the Merger, page 52
10. It appears you should provide two separate tables. Please revise this section to provide two separate tables: one table to disclose all golden parachute compensation, including both the arrangements and amounts previously disclose d and subject to a shareholder advisory vote under section 14A(a)(1) of the Exchange Act and a separate table to disclose only the new arrangements and/or revised terms subject to the separate shareholder vo te under section 14A(b)(2) of the Exchange Act or advise . Refer to Instruction 6 to Item 402(t) of Regulation S -K.
11. Please add disclosure to the retention bonus discussion here to indicate that Shuanghui International Holdings Limited had expressed an int erest that a retention program be established in connection with the merger negotiations .
Financing of the Merger, page 62
Bank of China Financing, page 66
12. Please revise to describe “certain of the same conditions” mentioned in the first paragraph of this section.
Regulatory Clearances and Approvals Required for the Merger , page 66
13. Please revise this section to disclose the status of all regulatory approvals required for the merger to be completed. Refer to Item 14(b)(5) of Schedule 14A. Please also include a brief of discussion of the government approvals sought in Mexico, Poland, Russia and Ukraine and the status of those approvals.
14. In this regard, we note some news articles regarding the merger that discuss that some Midwestern states have laws restricting foreign ownership of agricultural land. Please also discuss any state regula tory approvals that must be complied with or approval that
Robert W. Manly , IV Smithfield Foods, Inc. July 15 , 2013 Page 4
must be obtained in connection with the transaction and, if the so, the status of compliance or approval or advise. Refer to Item 14(b)(5) of Schedule 14A.
Conditions to th e closing of the Merger, page 80
15. For each condition to the merger that may be waived, please clarify which party may waive the condition.
Security Ownership of Certain Beneficial Owners and Management, page 88
16. Please revise this section to include the addresses of securit y owners and management. In addition, disclose the aggregate percent of shares owned by your beneficial owners and management. Refer to Item 403 of Regulation S -K.
17. Please identify t he natural persons with voting and investment power over the shares held by BlackRock, Inc.
Material U.S. Federal Income Tax Consequences of the Merger, page 90
18. We note your statement that you included “ a general discussion of the material U.S. federal income tax consequences of the merger .” Please revise this section to clarify that you have addressed all material U.S. federal income tax consequences. Please also delete the statement that the tax summary “is for general information only” because investors are entitled to rely on this section.
Where You Can Find More Information, page 94
19. Please revise to undertake to provide , by oral request, as well as written, all information that has been incorporated by reference into the filing. Refer to Note D.2 of Schedule 14A.
Other
20. We note that some items required by Schedule 14A are incorporated by reference from the Form 10 -K for fiscal year end ed April 28, 2013 , filed June 18, 2013 . We also note that the Part III information from that Form 10 -K is incorporated by reference to your to be filed definitive proxy statement . With your revised proxy statement, please include any of that Part III information that you are c urrently antici pating incorporating by way of the definitive proxy statement or advise.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Exchange Act of 1934 and al l applicable Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
Robert W. Manly , IV Smithfield Foods, Inc. July 15 , 2013 Page 5
In responding to our comments, please provide a written statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not fore close the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
Please contact Tonya K. Aldave at (202) 551 -3601 or me at (202) 551 -3210 with any other questions.
Sincerely,
/s/ Susan Block
Show Raw Text
July 15 , 2013 Via E -mail Robert W. Manly , IV Chief Financial Officer Smithfield Foods, Inc. 200 Commerce Street Smithfield, Virginia 23430 Re: Smithfield Foods, Inc. Preliminary Proxy Statement on Schedule 14A Filed June 18, 2013 File No. 001 -15321 Dear Mr. Manly : We have reviewed your filing an d have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter within ten business days by amending your filing, by providing the requested information, or by advising us when you will provide the requested response. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response. After reviewing any amendment to your filing and the information you provide in response to these comments, we may have additional comments. Summary Term Sheet, page 1 Solicitation of Proxies, page 3 1. We note that proxies may be solicited in person or by telephone, facsimile, electronic mail or other electronic medium. Please confirm that you will file all written soliciting materials, including any scripts to be used i n soliciting proxies by personal interview or telephone. Robert W. Manly , IV Smithfield Foods, Inc. July 15 , 2013 Page 2 Interest of Smithfield Directors and Executive Officers in the Merger, page 5 2. Please revise in this section and on page 52 to disclose the amount of total compensation to potentially be received by your directors and executive officers in connection with the proposed merger. Material U.S. Federal Tax Consequences of the Merger, page 7 3. Please revise here , on page 12, and in the entire section starting on page 68 that investors are encouraged to consult their own tax advisor s, rather than stating that they should consult their tax advisors. Background of the Merger, page 27 4. We note the disclosure in the opening paragraph that from time to time, Smithfield and the Smithfield Board, reviewed and evaluated strategic opportunities and that one such opportunity is discussed in the second paragraph. T o the extent any other strategic alternatives were considered by your Board, such as other strategic partnerships, merger or acquisition transactions, please revise this se ction to discuss in greater detail if, or when, those alternatives were considered and for what reason those alternatives were not considered or pursued. 5. We also note the discussion in the third paragraph of page 28 regarding other possible transac tions with Shuanghui International Holdings Limited (“Parent ”) in the past. To the extent other strategic alternatives were considered with Parent , please revise to expand to include a brief discussion of those transactions considered, the time frame for when discussions started and why other strategic alternat ives were not ultimately considered or pursued. Opinion of Smithfield’s Financial Advisor, page 41 6. Please provide us with copies of the “board books ” and any other material s prepared by your financial advisors. Such materials should include all presentations made by the financial advisors. Please also provide us with copies of the engagement letters. Selected Comparable Company Analysis, page 43 7. Please tell us whether any additional companies that fit the criteria were not used, and, if not, why not. Similarly, please tell us whether any additional transactions that fit the criteria for the selected transaction analysis were not use d, and, if so, why not. Robert W. Manly , IV Smithfield Foods, Inc. July 15 , 2013 Page 3 Selected Precedent Tran saction Analysis , page 44 8. We note that six of eight of the precedent transactions were announced over five years ago. Please briefly explain how these transactions are useful to this analysis in light of their age and disclose whether there is any limit ation in comparability because of the passage of time. Certain Financial Projections, page 48 9. Include a brief discussion of the underlying assumptions and limitations of the projections provided . Interests of Smithfield Directors and Executive Officers in the Merger, page 52 10. It appears you should provide two separate tables. Please revise this section to provide two separate tables: one table to disclose all golden parachute compensation, including both the arrangements and amounts previously disclose d and subject to a shareholder advisory vote under section 14A(a)(1) of the Exchange Act and a separate table to disclose only the new arrangements and/or revised terms subject to the separate shareholder vo te under section 14A(b)(2) of the Exchange Act or advise . Refer to Instruction 6 to Item 402(t) of Regulation S -K. 11. Please add disclosure to the retention bonus discussion here to indicate that Shuanghui International Holdings Limited had expressed an int erest that a retention program be established in connection with the merger negotiations . Financing of the Merger, page 62 Bank of China Financing, page 66 12. Please revise to describe “certain of the same conditions” mentioned in the first paragraph of this section. Regulatory Clearances and Approvals Required for the Merger , page 66 13. Please revise this section to disclose the status of all regulatory approvals required for the merger to be completed. Refer to Item 14(b)(5) of Schedule 14A. Please also include a brief of discussion of the government approvals sought in Mexico, Poland, Russia and Ukraine and the status of those approvals. 14. In this regard, we note some news articles regarding the merger that discuss that some Midwestern states have laws restricting foreign ownership of agricultural land. Please also discuss any state regula tory approvals that must be complied with or approval that Robert W. Manly , IV Smithfield Foods, Inc. July 15 , 2013 Page 4 must be obtained in connection with the transaction and, if the so, the status of compliance or approval or advise. Refer to Item 14(b)(5) of Schedule 14A. Conditions to th e closing of the Merger, page 80 15. For each condition to the merger that may be waived, please clarify which party may waive the condition. Security Ownership of Certain Beneficial Owners and Management, page 88 16. Please revise this section to include the addresses of securit y owners and management. In addition, disclose the aggregate percent of shares owned by your beneficial owners and management. Refer to Item 403 of Regulation S -K. 17. Please identify t he natural persons with voting and investment power over the shares held by BlackRock, Inc. Material U.S. Federal Income Tax Consequences of the Merger, page 90 18. We note your statement that you included “ a general discussion of the material U.S. federal income tax consequences of the merger .” Please revise this section to clarify that you have addressed all material U.S. federal income tax consequences. Please also delete the statement that the tax summary “is for general information only” because investors are entitled to rely on this section. Where You Can Find More Information, page 94 19. Please revise to undertake to provide , by oral request, as well as written, all information that has been incorporated by reference into the filing. Refer to Note D.2 of Schedule 14A. Other 20. We note that some items required by Schedule 14A are incorporated by reference from the Form 10 -K for fiscal year end ed April 28, 2013 , filed June 18, 2013 . We also note that the Part III information from that Form 10 -K is incorporated by reference to your to be filed definitive proxy statement . With your revised proxy statement, please include any of that Part III information that you are c urrently antici pating incorporating by way of the definitive proxy statement or advise. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Exchange Act of 1934 and al l applicable Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. Robert W. Manly , IV Smithfield Foods, Inc. July 15 , 2013 Page 5 In responding to our comments, please provide a written statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not fore close the Commission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. Please contact Tonya K. Aldave at (202) 551 -3601 or me at (202) 551 -3210 with any other questions. Sincerely, /s/ Susan Block Susan Block Attorney -Advisor cc: Via E -mail Patrick J. Naughton, Esq. Simpson Thacher & Bartlett LLP