Animal Farm Deal on Hold While SEC Looks at Books
Although it might seem like a meat match made in food heaven, late last year the SEC began an investigation into some of IBP's accounting practices, including the recording of IBP's acquisition of DFG Foods, a Chicago hors d'oervre maker. The SEC is analyzing a possible $47 million charge that IBP may take relating to the sale. IBP recorded a $9 million charge last year relating to what was described by the PricewaterhouseCoopers audit team as "overstated inventory value."
IBP reportedly may take an additional $108 million loss against 2000 income as it tries to clean up accounting irregularities in the books of DFG Foods.
Tyson's acquisition of IBP is valued at $3.2 billion, but completion of the food giant's offer, set to expire next week, is awaiting  the SEC examination.