Continental Grain Co, a large shareholder in Smithfield Foods Inc, moved toward a proxy fight with the meat company on Thursday, saying it will seek shareholder support in connection with a turnaround plan it says could lift Smithfield's shares to $40 in three years.
In a presentation filed on Thursday with U.S. securities regulators, Continental repeated its view that Smithfield should split into three companies, use the proceeds to buy back shares, restructure its business and institute a dividend in line with peers.
It also said Smithfield should immediately add three new directors.
Continental sent Smithfield a letter in March urging a breakup, and on April 1, Smithfield said separating its hog production, international and packaged meats businesses would make it less competitive.
Continental said on Thursday that Smithfield's answer was "inadequate and a continuation of an unacceptable status quo."
Continental Grain was formed in 1813 as a grain trading firm in Arlon, Belgium and expanded into the flour milling business in the 1890s. The founding Fribourg family relocated to the United States after World War II.
The company became a major shareholder in Smithfield in 2007 with Smithfield's acquisition of Premium Standard Farms.
Paul Fribourg, who runs Continental, quit Smithfield's board in 2009 over a disagreement with the company's plan at the time to issue $250 million worth of shares of common stock.
A Smithfield spokeswoman was not immediately available to comment.
Smithfield shares were down 16 cents, or 0.6 percent, to $25.76 on the New York Stock Exchange.