SAFM - Sanderson Farms falls on report that DOJ negotiating remedies in Cargill takeover

Sanderson Farms ( NASDAQ: SAFM ) quickly d ropped 2.3% on a report that the U.S. Dept. of Justice is said to be negotiating remedies with Cargill and Continental Grain on their planned purchase of the company.

The parties are said to be talking about a labor safeguard, though discussion are still fluid and the agency could still sue to block the transaction, according to traders, who cited a report from Capitol Forum was being circulated among them.

Sanderson Farms ( SAFM ) has traded above the $203 /share deal since las month as some investors appear to hope that the transaction will be blocked and SAFM will be valued solely on its fundamentals, which have been improving due to inflation of chicken prices.

CNBC's David Faber in early March reported the sale would likely be blocked unless some changes are made to the transaction.

Dealreporter said last month that Sanderson ( SAFM ) wants to be compensated if the deal is blocked and is expected to ask for better terms for the combination. A price of $240/share is not unreasonable in a revised deal.

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