Smithfield Foods (SFD) shareholder Continental Grain Co. sent a letter to the pork company’s board on Thursday to urge a breakup of the company.
In its letter, Continental said the pork producer, which is valued at about $3.42 billion, should consider whether splitting into three separate companies will increase value for shareholders. It added that Smithfield’s board should hire an independent investment bank to help analyze potential strategic changes.
The letter, which also suggested a regular cash dividend, was included in a SEC filing.
“While we have reduced our position, we continue to hold an important stake and are prepared to maintain a significant holding if we see the board and management taking the necessary steps to unlock the value we believe exists in this company,” Continental said in its letter.
Smithfield acknowledged in a statement Friday morning that it received the letter and said it “will review it in due course.”
Continental and several related shareholders own a stake of about 6% in Smithfield. The firm has held a major stake in Smithfield for seven years, while two of its executives, chairman Paul J. Fribourg and Michael Zimmerman, resigned from Smithfield’s board in 2009 in objection to its $250 million stock sale.
Shares of Smithfield, which soared on Thursday amid earnings that beat expectations, were up 4.34% to $25.75 a share after Friday’s opening bell. The stock is up 4.8% in the last 12 months.