By Soyoung Kim, Olivia Oran and Nadia Damouni

(Reuters) - China's Shuanghui International is close to securing shareholder approval for its $4.7 billion offer for Smithfield Foods Inc <SFD. N>, which would be the biggest purchase of a U. S. company by a Chinese firm, ahead of the vote next week, three people familiar with the matter said.

The shareholder vote will be a key milestone that also raises pressure on activist investor Starboard Value LP, which opposes the transaction, to come up with an alternative plan for the world's largest pork producer.

The deal needs the approval of just over 50 percent of Smithfield shareholders by a special meeting scheduled for September 24.

Shuanghui is already well on its way to crossing that threshold with votes that have already come in, and remains optimistic it will be able to close the deal by September 26, the sources said, asking not to be named because the matter is confidential.

Hedge fund Starboard, which has a 5.7 percent stake in Smithfield, has criticized the deal and has been working on lining up an alternative proposal. The fund is expected to make an announcement later this week, although it is unclear if it will include a counter proposal, two other people familiar with the matter said.

Industry bankers have expressed some skepticism about Starboard's ability to line up a new bidder for the company, and the results so far show that it may be running out time. Shareholder votes, however, can still be changed.

Smithfield and Shuanghui declined to comment, while Starboard did not immediately respond to requests for comment.

An approval by Smithfield's shareholders would mark the end of a process that got mired in controversy earlier this summer as some U. S. politicians expressed worries about food safety and domestic pork supplies if the company were to end up in Chinese hands. Shuanghui's bid is aimed to satisfy China's growing appetite for pork.

Starboard has said it had received "nonbinding written indications of interest" from other parties willing to pay more than the $34 per share offered by Shuanghui in May. The hedge fund, however, has acknowledged that if a more lucrative acquisition bid could not be finalized and presented, it would vote in favor of the Shuanghui bid.

Shuanghui has been making progress in trying to close the deal, getting endorsement this month from proxy advisory firm ISS as well as security clearance from the U. S. Committee on Foreign Investment.

Shuanghui's offer represented a 31 percent premium to Smithfield's closing share price at the time. The company also said it would assume $2.4 billion of Smithfield's debt.

The agreement came after Smithfield's largest shareholder Continental Grain Co. pushed for change, including a call to break up the company.

(Reporting by Soyoung Kim, Olivia Oran and Nadia Damouni in New York; Editing by Paritosh Bansal and Stephen Coates)

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