DOW JONES NEWSWIRES
Smithfield Foods Inc. (SFD) said Paul Fribourg is resigning from the pork producer's board because he objects to the company's plans to sell $250 million in stock to strengthen its balance sheet and perhaps retire debt.
Shares were down 3.8% at $13.76 in recent trading. The company's market value as of Monday's close was about $2 billion and the stock has lost one-third of its value in the past year.
Fribourg, who is chairman and chief executive of Continental Grain Co., has an 8.8% stake in Smithfield Foods. He has been on Smithfield's board since 2007. Also, Michael Zimmerman, Continental Grain's chief financial officer, resigned as an advisory director.
Smithfield said Tuesday that Fribourg advised the company he doesn't "believe an offering of this magnitude is necessary at this time." The planned sale was announced late Monday.
Smithfield, the largest U.S. pork-products producer, has posted losses in four of the past five quarters because of high feed costs and lower demand. One reason for the drop in demand is the sector's association with the H1N1 virus.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; tess.stynes@dowjones.com