ConAgra Foods Announces $900 Million Accelerated Share Repurchase Program
July 01 2008 - 8:00AM
Business Wire
ConAgra Foods, Inc., (NYSE:CAG) one of North America�s leading
packaged food companies, today initiated an accelerated share
repurchase program (�ASR�) under which the company will spend $900
million to repurchase shares of its common stock. Reflecting
previously announced plans, the ASR will be funded with a portion
of ConAgra Foods� proceeds from the recently completed sale of its
Trading and Merchandising segment. When the ASR is completed, the
company�s current share repurchase authorization will be complete.
Affiliates of Merrill Lynch International (�MLI�) have advised
ConAgra Foods with respect to the program. The ASR will be
completed under separate agreements with MLI and Bank of America,
N.A. (�BofA�). Under the agreements, ConAgra Foods will prepay a
total of $900 million ($450 million to each of MLI and BofA) on
July 1, 2008 for shares of the company�s common stock to be
purchased from MLI and BofA. The number of shares to be purchased
under each agreement (subject to agreed upon minimum and maximum
numbers of shares in each agreement) will be determined by dividing
the $450 million purchase price in each agreement by the arithmetic
mean of the volume-weighted average prices of shares of ConAgra
Foods' common stock in a valuation period, less a discount. The
valuation period applicable to each agreement will begin following
the completion of a hedging period, during which MLI and BofA will
establish initial hedging positions in respect of their obligations
under the ASR. The valuation period under each agreement continues
until the associated repurchase is completed. The company will
receive an aggregate of 32,676,350 shares on the July 1, 2008
prepayment date and will receive the balance of the minimum number
at the end of the hedging period. It will receive any additional
repurchased shares at the end of the valuation period(s), which
will occur during the fourth fiscal quarter of 2009. ConAgra Food�s
outstanding shares used to calculate earnings per share will be
reduced by the number of shares repurchased as they are delivered
to the company, and the aggregate $900 million purchase price will
be recorded as a reduction in stockholders� equity upon its
prepayment. The ASR agreements are subject to terms customary for
similar agreements, including provisions permitting adjustments to
the length of the valuation and hedging periods, providing for the
effect of extraordinary corporate transactions, and setting forth
other circumstances under which the agreements may be terminated.
ConAgra Foods, Inc., (NYSE:CAG) is one of North America's leading
packaged food companies, serving grocery retailers, as well as
restaurants and other foodservice establishments. Popular ConAgra
Foods consumer brands include: Banquet, Chef Boyardee, Egg Beaters,
Healthy Choice, Hebrew National, Hunt's, Marie Callender's, Orville
Redenbacher's, PAM, Reddi-wip, and many others. For more
information, please visit us at www.conagrafoods.com. Note on
Forward-looking Statements: This release contains forward-looking
statements. These statements are based on management�s current
views and assumptions of future events and financial performance
and are subject to uncertainty and changes in circumstances. The
company undertakes no responsibility for updating these statements.
Readers of this release should understand that these statements are
not guarantees of performance or results. Many factors could affect
the company�s actual financial results and cause them to vary
materially from the expectations contained in the forward-looking
statements. These factors include, among other things, availability
and prices of raw materials, product pricing, future economic
circumstances, industry conditions, the company�s ability to
execute its operating and restructuring plans, competitive
environment and related market conditions, operating efficiencies,
the ultimate impact of the company�s recalls, access to capital,
actions of governments and regulatory factors affecting the
company�s businesses and other risks described in the company�s
reports filed with the Securities and Exchange Commission. The
company cautions readers not to place undue reliance on any
forward-looking statements included in this release, which speak
only as of the date made.
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