Hedge fund to back Chinese takeover of Smithfield

Starboard Value said Friday it was giving up its attempt to block the sale of US pork giant Smithfield foods to China\'s Shuanghui, making approval of the $7.1 billion takeover likely. The hedge fund said in a filing with the Securities and Exchange Commission that it was not able to bring together an alternative bid in time before the September 24 Smithfield shareholder vote on the deal. That opens the door for what will be the largest ever Chinese takeover of a US firm, an iconic US company called the world\'s largest pig farmer and pork processor. For Shuanghui International, a large Chinese meat processor, it locks in a strong supply of pork products to deliver to the huge, undersupplied Chinese market. Starboard had argued that Smithfield is worth $9-10.8 billion if broken up, much higher than what Shuanghui had offered: a $4.5 billion in cash, $34 a share deal that, including Smithfield debt, comes to a $7.1 billion value. Given the time for the vote and restrictions on how an alternative bid could be made, Starboard said, \"it proved challenging for the bidder group to formalize and deliver an alternative proposal prior to the special meeting scheduled for September 24.\" Starboard said it was confident that given time it could have assembled a group of buyers that would offer more than the proposed by Shuanghui, but not before the shareholder vote. \"Therefore, at this time, unless another proposal emerges, we plan on voting in favor of the proposed merger.\" Smithfield Food shares fell on the news, losing 0.6 percent to $33.98 in midday trade in New York.