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MENAFN - ProactiveInvestors - Australia - 28/11/2012

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"We are very pleased to have reached an agreement with Ralcorp after a period of collaborative dialogue between the two companies," ConAgra Foods CEO Gary Rodkin said.
(MENAFN - ProactiveInvestors - Australia) ConAgra Foods (NYSE:CAG) has made a 90 per share agreed bid for Ralcorp Holdings (NYSE:RAH) - a 28 per cent premium over Ralcorp's closing stock price Monday.

The deal, valued at 6.8 billion including debt, would create one of the largest North American packaged-food companies and is expected to close in March 2013. The combined company will employ 36,000 people and have annual sales of about 18 billion.

"We are very pleased to have reached an agreement with Ralcorp after a period of collaborative dialogue between the two companies," ConAgra Foods CEO Gary Rodkin said.

"Ralcorp is already the largest private label food company in the U.S. and is well positioned for future growth. The acquisition of Ralcorp is a logical and exciting step for ConAgra Foods. Adding Ralcorp provides us with a much larger presence in the attractive and growing private label segment and accelerates our Recipe for Growth strategy."

Ralcorp CEO and president Kevin J. Hunt added: "We believe the two companies are a great fit, and our employees will benefit as part of a larger diversified organization with the necessary scale and resources to be a leader in today's rapidly evolving marketplace."

"On behalf of the Ralcorp Board and management team, we thank our dedicated employees for their continued hard work, which has enabled us to grow Ralcorp to a position of strength with our many private label offerings across both retail and commercial channels."

The boards of both companies have unanimously approved the deal.

Ralcorp last year rejected several ConAgra offers, including a 94 per share bid that valued the company at 5.2 billion, and chose instead to spin off its Post cereal business.

Activist investor Corvex Management, Ralcorp's largest shareholder, in October demanded that the food manufacturer either sell itself, buy another company or change its strategy after a series of earnings disappointments.

ConAgra said the deal, which was approved by the boards of both companies, will add to earnings in the first year.

Separately, Ralcorp posted a fourth-quarter loss of 44.2 million, narrower than its 424.1 million loss in the prior-year quarter.

For its fiscal fourth quarter ended September 30, Ralcorp said its net sales grew to 1.07 billion, up nearly 8 per cent from the fourth quarter of fiscal 2011.

St. Louis-based Ralcorp moved into the black for full-year fiscal 2012, reporting net income of 73.4 million compared with a loss of 241.2 million in fiscal 2011. The company's net sales rose 14 percent in fiscal 2012 to 4.3 billion.


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