ConAgra Foods has said that it is “extremely disappointed” at Ralcorp’s rapid dismissal of its latest takeover offer.
The US food group said its US$5.18bn bid offered Ralcorp investors “greater certainty” than the private-label firm’s plan to split in two.
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Ralcorp rejected ConAgra’s US$94-a-share offer on Friday (12 August), claiming that it was “not in the best interests of the company and its shareholders”. ConAgra first lodged its interest in Ralcorp in May when it made a $4.9bn takeover bid, which was promptly turned down.
Ralcorp is to instead spin off its branded cereal business Post Foods from its private-label operations.
In an open letter to Ralcorp yesterday, ConAgra said that Ralcorp took less than 24 hours to reject its offer and did so without discussion between the two firms.
“We are extremely disappointed by Ralcorp’s summary rejection of our strong proposal and its repeated refusals to explore this opportunity for its shareholders,” ConAgra CEO Gary Rodkin said.
He added that the share proposal represents a 44% premium to Ralcorp’s closing price on 21 March, the last business day prior to when ConAgra made its first formal approach in March.
“We believe this proposal is highly attractive to Ralcorp’s shareholders and represents superior value compared to any alternatives you could pursue, including your recently announced plan to split apart the company,” Rodkin said. “We strongly encourage you to consider this proposal as expeditiously as possible. In the interim, we look forward to our advisors speaking in the coming few days.”
