ConAgra tells Ralcorp it’s now or never
North American packaged foods giant ConAgra Foods announced today that it will withdraw a US$5.18 billion proposal to takeover US food manufacturer Ralcorp Holdings if negotiations do not begin by 19 September 2011.
ConAgra has put forward three separate takeover proposals to Ralcorp in the past six months, all of which have been rejected by Ralcorp. On 12 August 2011, Ralcorp snubbed a proposal from ConAgra to buy a US$94 per share in the company.
In a statement released today, ConAgra said, “Since August 12, ConAgra Foods has heard from many of Ralcorp’s shareholders who are urging Ralcorp to enter into negotiations with ConAgra Foods based on the strength of ConAgra Foods’ $94 per share all-cash proposal. However, Ralcorp has continued to refuse ConAgra Foods’ attempts to engage privately and hold a constructive discussion regarding the strong value, strategic logic and certainty of its proposal.”
Meanwhile, Robbins Umeda, a US-based shareholder rights litigation firm, has commenced an investigation into “possible breaches of fiduciary duty and other violations of state law” by members of the board of directors of Ralcorp Holdings, Inc. in connection with its rejection of ConAgra’s takeover proposal.
Robbins Umeda’s investigation focuses on whether members of Ralcorp’s board are acting in the best interests of shareholders by refusing to enter into negotiations with ConAgra Food and rejecting its proposal.
In a recent press release issued by the company, the Chairman of Ralcorp’s board, William P. Stiritz, reported that the ConAgra Food proposal was rejected by the board in favor of the board’s previously approved decision to separate Post Foods and Ralcorp into two publicly-traded entities. On August 12, 2011, the day Ralcorp rejected the ConAgra offer, Ralcorp stock closed at $79.02, almost $15.00 below ConAgra’s proposed purchase price