Flying Feathers In the Coop

He looks like a farm-implements salesman in his brown uniform, but make no mistake: Don Tyson, 58, is the king of America's poultry producers. His Springdale, Ark., company slaughters more than 15 million chickens a week, turning out 1,300 products ranging from fresh broilers to frozen nuggets. His desire to rule an even bigger roost has kept the feathers flying in the chicken industry since last October, when Tyson (1988 revenues: $2 billion) offered $894 million for the No. 3 producer, Memphis-based Holly Farms.

But the Tennessee company clucked loudly at Tyson's advances and turned to another chicken producer interested in acquiring some of Holly Farms' juicy parts. Omaha-based ConAgra, the No. 2 grower, agreed on a so-called lockup arrangement in which the Nebraska firm can buy some of Holly Farms' operations if the marauding Tyson succeeds in taking over. ConAgra, which already controls 20% of the U.S. beef industry, 33% of the lamb market and nearly 10% of broiler production, would like to bring Holly Farms' Weaver frozen-chicken label into the same shed with its Armour, Banquet and Country Pride brands. Tyson is now suing both companies in an attempt to overturn the lockup deal. Both Tyson and ConAgra are hungry for a bigger helping of the sizzling $7 billion U.S. chicken market. Largely because of health concerns over fat and cholesterol in beef, U.S. consumers have increased their annual per capita consumption of chicken from 43.5 lbs. in 1978 to more than 62 lbs. currently.

To woo Holly Farms' stockholders, Tyson offered a spicier bid of $1.15 billion last week, contingent on the cancellation of the ConAgra agreement. In response, the Holly Farms board of directors said that unless ConAgra comes up with a better offer before a special stockholders meeting in late February, it will recommend the Tyson offer to its shareholders. Then the poultry prince will really have something to crow about.