A truck loaded with chicken leg quarters leaves Sanderson Farms’ poultry processing facility en route to Mexico in Palestine, Texas on January 17, 2018.

Jason Lange | Reuters

Sanderson Farms is considering a sale as chicken prices rise due to increased demand, according to a report in the Wall Street Journal.

Sanderson Farms’ shares closed at $ 166.58 on Monday, up 6.96% from talks of a possible deal. In expanded trading, the stock rose more than 11% and increased its market cap to more than $ 3.72 billion. Every buyer would have to pay a premium on top of this price.

Citing people familiar with the matter, the newspaper said Sanderson hired Centerview Partners for advice after piquing the interest of potential buyers, including agricultural investment firm Continental Grain. The Journal said the talks between the parties may not result in a sale.

A combination of strong demand and labor shortages has pushed poultry prices higher and further increases may be ahead. Chicken wing prices averaged $ 2.72 a pound last week, nearly 20 cents higher than the same week last year, according to the U.S. Department of Agriculture.

Sanderson is the third largest food processor in the US in an area dominated by Tyson Foods.

According to the report, a deal with Continental would create a company that produces about 15% of the country’s chicken. That would put the newly formed company just behind Pilgrim’s Pride, which has a 16% market share, the report said.

Continental owns Wayne Farms, a small chicken processor, and was once hoping to go public and act as a consolidator in the industry, the Journal said.

When reached by CNBC, Sanderson and Centerview declined to comment. Continental Grain did not immediately respond to a request for comment.

Read the full report in the Wall Street Journal.