Wynnefield to vote against Cagle's buyout

By Lisa Kerner

Charlotte, N.C., Dec. 24 - Cagle's Inc. stockholder the Wynnefield Group is opposed to the planned $9.00-per-share acquisition of the company by James Douglas Cagle, George Douglas Cagle, James Douglas Cagle and the Cagle Family Holdings LLC. The Cagle group made its offer to take the company private in November.

Wynnefield, in a Dec. 21 letter to Cagle's special committee, asked the committee to "fulfill its fiduciary duties to act in the best interest of the company's minority shareholders by rejecting this proposal."

Specifically, Wynnefield said the proposal is inadequate because:

• It does not reflect the true intrinsic value of the company;

• It does not recognize the substantial value of Cagle's just-completed debt reduction program; and

• It does not reflect the full long-term value of the company.

Wynnefield said the book value of the company is $10.30 per share as of Sept. 29.

"Thus, the Cagle family proposal represents price-to-book value of only 0.87x. By way of comparison, the Pilgrim's Pride purchase of Gold Kist provided those shareholders with 2.2x book value," Wynnefield noted.

Despite short-term challenges faced by Cagle's, Wynnefield said it believes in "the long-term prospects of Cagle's as a public company" and plans to vote all of its shares against the transaction.

Wynnefield owns 217,400, or 4.7%, of Cagle's outstanding common shares.

Cagle's, with its subsidiary, Cagle's Farms, Inc., produces, markets and distributes fresh and frozen poultry products in the southeastern United States. The company is based in Atlanta.

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