Reports that poultry producer Sanderson Farms was being courted by potential buyers sent shares higher in early trading Tuesday.
The company’s stock was up more than 10% (over $17 per share) as of 10:20 a.m. ET, hitting a new 52-week high.
The Wall Street Journalreported late Monday that the company was exploring a sale amid growing demand for chicken products. Sanderson is the nation’s third-largest chicken producer and has a market value of $4 billion, given today’s price spike.
Poultry prices have taken flight this year owing to increased demand and labor shortages. A shortage of chicken wings even prompted fast food chain Wingstop to launch a virtual brand called Thighstop, focused on chicken thighs.
Continental Grain Co., which owns a smaller chicken processor, seems to be the leading suitor, according to the Journal. A team-up between the two companies would create an organization that produces about 15% of the nation’s chicken—just behind Pilgrim’s, the second-largest producer.
Sanderson, last year, rejected an unsolicited takeover offer from a different potential buyer, saying the offer was too low.
While Sanderson is not as well known as industry leader Tyson, the company currently ranks No. 662 in the Fortune 1000 and, in 2010, ranked ninth among Fortune’s World’s Most Admired Companies in the food-production sector.
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