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Subsequent Events | 9 Months Ended
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Jun. 28, 2014
Subsequent Events [Abstract] |
Subsequent Events | SUBSEQUENT EVENTS Hillshire Brands Acquisition On June 8, 2014, we submitted to Hillshire a unilaterally binding offer to acquire its outstanding stock for $63.00 per share in cash. The offer was accompanied by a definitive agreement and plan of merger (the “Merger Agreement”) among Tyson, Merger Sub and Hillshire, which was executed by Tyson and Merger Sub. The offer was contingent upon the termination of the merger agreement between Hillshire and Pinnacle Foods, Inc. (“Pinnacle”), which occurred on July 1, 2014, at which time Hillshire accepted the offer and executed the Merger Agreement. The Merger Agreement required that we pay to or on behalf of Hillshire the termination fee of $163 million due to Pinnacle upon termination of the merger agreement between Hillshire and Pinnacle, which we subsequently paid on July 2, 2014. T he transaction is valued at an estimated $8.9 billion, including the assumption of Hillshire’s net debt and $163 million termination fee. On July 16, 2014, pursuant to the Merger Agreement, we commenced a tender offer to purchase all of the issued and outstanding shares of Hillshire common stock at a purchase price of $63.00 per share in cash, without interest. The tender offer is scheduled to expire on August 12, 2014 and is subject to the condition that two-thirds of the outstanding shares of Hillshire common stock shall have been validly tendered prior to the expiration of the tender offer and not withdrawn. The Merger Agreement also contains other customary conditions, including the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Subject to certain conditions and limitations, Hillshire granted Tyson an option to purchase from Hillshire after the successful completion of the tender offer enough additional Hillshire shares so that Tyson will own more than 90% of the outstanding shares of Hillshire common stock, in order to facilitate the completion of the merger through the “short-form” procedures available under Maryland law. Following the consummation of the tender offer, and subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, the Merger Agreement provides that Merger Sub will merge with and into Hillshire, with Hillshire surviving the merger as our wholly-owned subsidiary. At and following consummation of the merger, any remaining outstanding shares of Hillshire common stock not owned, directly or indirectly, by us, Merger Sub or Hillshire will be converted into the right to receive $63.00 per share in cash, without interest. We expect to close the acquisition upon the completion of the tender offer, however, there can be no assurance that the acquisition will close at such time. Acquisition Financing In the third quarter of fiscal 2014, we entered into a fully committed 364-day, $8.2 billion unsecured bridge facility. In July 2014, we decreased the bridge facility to $5.7 billion and added a $2.5 billion senior unsecured term loan facility. The committed facilities, together with cash on hand, will be available to fund the Hillshire acquisition, including the payment of related fees and expenses. The lenders are obligated to fund the facilities, subject to customary closing conditions. The bridge facility provides that the commitments will be automatically reduced on a dollar-for-dollar basis by, among other things, the net cash proceeds of certain offerings of debt, equity or equity-linked securities; the committed principal amount of certain term loan facilities; and the net cash proceeds of certain asset sales and will mature on the date that is 364-days after the date on which lenders are obligated to make initial loans under the bridge facility. Permanent funding for the Hillshire acquisition includes a mix of Class A common stock, tangible equity units, term loans, senior notes, and cash on hand. Class A Common Stock: On August 5, 2014, we completed the issuance of 23.8 million shares of our Class A common stock for total proceeds, net of underwriting discounts and other estimated expenses, of $873 million. The amount of shares of Class A common stock sold may increase up to 3.6 million shares if the underwriters exercise their over-allotment option, which expires on August 29, 2014. Tangible Equity Units: On August 5, 2014, we completed the issuance of 30 million, 4.75% tangible equity units. Total proceeds, net of underwriting discounts and other estimated expenses, was $1,454 million. Each tangible equity unit, which has a stated amount of $50, is comprised of a prepaid stock purchase contract and a senior amortizing note due July 15, 2017. The senior amortizing note is payable quarterly and has a stated interest rate of 1.5%. Unless earlier redeemed or settled, each purchase contract will automatically settle on July 15, 2017, and the Company will deliver between a minimum of 31.7 million and a maximum of 39.7 million of the shares, subject to adjustment, based upon the applicable market value of the Class A common stock. Prior to any adjustments, we will deliver the minimum amount of shares upon conversion if our share price is equal to or greater than the conversion price of $47.25 and will deliver the maximum shares upon conversion if our share price is equal to or less than the reference price of $37.80. If our share price upon conversion is between the reference and conversion prices, we will deliver a variable amount of shares between the minimum and maximum amounts. The fair value of the prepaid stock purchase contracts, which is estimated at $1,295 million, will be recorded in Capital in Excess of Par Value, net of its offering expenses. The fair value of the senior amortizing notes, which is estimated at $205 million, will be recorded in debt, of which $65 million is current. Term Loan Facility: The committed unsecured term loan facility provides for total term loan commitments in an aggregate principal amount of $2,500 million, consisting of a $1,306 million 3-year tranche facility, a $594 million 5-year tranche A facility, and a $600 million 5-year tranche B facility. The principal of the 3-year tranche facility and the 5-year tranche A facility each amortize at 2.5% per quarter. The lenders are obligated to fund the loans upon consummation of the tender offer, subject to customary closing conditions. In addition, we estimate the term loan issuance costs will total approximately $13 million. Senior Notes Offering: On August 5, 2014, we launched and priced a public offering of senior unsecured notes with an aggregate principal amount of $3,250 million, consisting of $1,000 million due August 2019 (“2019 Notes”), $1,250 million due August 2024 (“2024 Notes”), $500 million due August 2034 (“2034 Notes”), and $500 million due August 2044 ("2044 Notes"). The 2019 Notes, 2024 Notes, 2034 Notes, and 2044 Notes carry interest rates of 2.65%, 3.95%, 4.88% and 5.15%, respectively, with interest payments due semi-annually on August 15 and February 15. After the original issue discounts of $7 million, we expect to receive net proceeds of $3,243 million. In addition, we estimate that the total senior notes offering costs will total approximately $29 million. We expect to close on the senior notes offering on August 8, 2014. Covenants and Guarantees: The senior notes, term loan facility and bridge facility contain certain covenants which are consistent with our existing covenants that are described in Note 7: Debt. The senior notes, term loan facility and bridge facility are fully guaranteed by TFM Parent, until such date as TFM Parent is released from all of its guarantees of other indebtedness of the Company. Sale of Brazil and Mexico Chicken Operations On July 28, 2014, we announced we reached a definitive agreement to sell our chicken production operations in Brazil and Mexico to JBS SA (“JBS”) for $575 million. The all-cash transaction is subject to customary closing conditions and requires necessary government approvals in Brazil and Mexico. We expect to close the sale by the end of calendar 2014. The combined operations of Brazil and Mexico, which are part of our International segment, had annual sales of approximately $1 billion and we expect to realize a net gain upon completion of the transaction. We intend to use the cash receipts to pay down debt.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References No definition available. + Details
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