SMITHFIELD, VA. — In response to the Continental Grain Co.’s recommendation that Smithfield Foods spin off its Hog Production and some European assets, Smithfield said it would consider all recommendations, but iterated that it considered Continental’s proposal to be “inherently flawed.”

“Our No. 1 priority is to create long-term value for our shareholders, and we welcome the perspectives of all of our investors,” said C. Larry Pope, president and chief executive officer of Smithfield Foods. “Consistent with this objective, we are continuing to review Continental Grain’s presentation and will provide a specific response in due course.

“Our board and management are focused on the implementation of our growth strategy that is working. We recently delivered the two best years of operating performance in our company’s history, we have restructured and streamlined our Pork segment, drastically de-levered our balance sheet, returned significant cash to shareholders and reduced commodity exposure. As a result of our work, our stock price has nearly doubled since 2009 when Continental Grain resigned from our board.

“Further, we believe that Continental Grain’s analysis of the benefits of a divestiture of our Hog Production business and select European assets, which they have made before, is inherently flawed, based on an intensive and ongoing review of these and other alternatives by the board, management and our financial and legal advisers.

“Smithfield’s board, consisting of a balanced mix of directors who know our industry well, has a strong track record of taking aggressive action to enhance value for all shareholders.”

In a filing with the U.S. Securities and Exchange Commission on April 25, Continental Grain said if Smithfield Foods’ management team followed its recommendation, the company’s stock would achieve a value of $40 per share within three years. Smithfield’s stock closed at $25.93 per share on Friday, April 26. For the most recent 52-week period the company’s stock has ranged between $17.55 and $27.33 per share.

Specific recommendations made by Continental Grain include:

• Splitting into three companies by divesting Smithfield’s “underperforming and highly volatile” Hog Production and select European assets;

• Reinvesting the proceeds from asset sales for additional share repurchases;

• Instituting an annual dividend;

• Restructuring its packaged meats business to achieve profitability levels in line with industry peers;

• Adding three new members to the board “whose background and experience properly reflect the current business” and continuing to renew and strengthen the board annually;

• Improving management depth at key business units; and

• Creating greater alignment between management compensation and shareholder returns.