UPDATE: Ralcorp Rejects Another Raised Takeover Bid From ConAgra

Ralcorp Holdings Inc. (RAH) said Friday that it had rejected a third unsolicited takeover offer from ConAgra Foods Inc. (CAG) that valued the private-label specialist at around $5.2 billion.

ConAgra had sweetened its all-cash offer to $94 a share. Ralcorp had previously turned down an $82 per share offer in April and an $86 a share approach in May.

This is ConAgra's first move since Ralcorp bolstered its defenses by announcing plans to spin off its Post cereals unit and to bulk up by paying $545 million for the refrigerated dough business of Sara Lee Corp. (SLE).

Ralcorp said its board of directors unanimously rejected the nonbinding offer contained in a letter sent by ConAgra on Thursday. The new offer pushed Ralcorp shares up by almost 9% in after-hours trade, though the stock was recently up 6.1% at $83.87.

ConAgra shares closed up 0.8% at $23.19 on Friday, valuing the company at $9.5 billion, compared with around $4.4 billion for Ralcorp.

Omaha-based ConAgra, best known for its Hebrew National hot dogs and Hunt's canned vegetables, wants to acquire Ralcorp to tap the faster growth rates in private-label groceries as budget-conscious shoppers pare spending on branded goods.

Any deal would also see it assume more than $2.5 billion in debt, and analysts have speculated it may opt to make an approach directly to Ralcorp shareholders or opt to wait until after the Post spin off before launching a further bid.

Ralcorp said ConAgra's latest bid wasn't in the best interests of the company and its shareholders.

In a letter to ConAgra released Friday, Ralcorp Chairman William Stiritz said the company is firmly committed to its plan to separate cereal brand Post Foods from Ralcorp. He said the board unanimously determined that it and ConAgra "have nothing further to discuss."

ConAgra wasn't immediately available for comment.

-By Joan E. Solsman and Doug Cameron, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com

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