ConAgra and Ralcorp: The Deal is Dead

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September 20, 2011

The takeover attempt by ConAgra of Ralcorp intensified early this week with Ralcorp rejecting another offer and ConAgra issuing an ultimatum -- Ralcorp had until 5 p.m. Monday to start discussions or it would walk away. And walk it did.

"Ralcorp has an established and strong track record of creating superior value for shareholders," said Chairman William Stiritz in a statement. "Our private label business has been enormously successful and is well-positioned for the future."

St. Louis-based Ralcorp announced in July plans to spin off its Post cereal business and focus on its private label foods business. The company maintains this offers better value for its shareholders. ConAgra has made several bids for Ralcorp since March; all were rejected including a $94 per share offer in August. Management said the $5.2 billion offer was insufficient and the board of directors adopted a shareholder rights plan -- or poison pill -- in May to effectively block a hostile takeover.

ConAgra hoped to add Ralcorp’s brands to help build a private label portfolio. Today it issued a statement, saying the company has turned its back on future talks: “This follows Ralcorp’s failure to enter into a constructive dialogue with ConAgra Foods regarding its all-cash proposal for Ralcorp by the designated deadline of 5:00 p.m. Eastern time on September 19, 2011.”

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