ConAgra Announces Cash Tender Offer - Analyst Blog
January 03 2013 - 1:00PM
Zacks
ConAgra Foods, Inc. (CAG) announced its offer
to buy certain notes of Ralcorp Holdings Inc.
(RAH). These notes include any or all Floating Rate Notes due
August 15, 2018, 7.29% Notes due in August 15, 2018 and 7.39% Notes
due in August 15, 2020. All these notes are issued by Ralcorp.
The offer also explores the possibility of carrying out some
proposed amendments to the indenture under which the notes were
issued in a bid to eliminate certain covenants, restrictive
provisions and events of default.
The offer takes place subsequent to the merger agreement signed
on November 26, between ConAgra Foods’ Phoenix Acquisition Sub
Inc., a wholly owned subsidiary of ConAgra, and Ralcorp. The
agreement eventually leads to ConAgra’s acquisition of Ralcorp.
In order to fulfill at least two-thirds of Ralcorp’s outstanding
shareholders’ condition to secure their approval of the merger, the
company began rolling out its definitive proxy statement on
December 28, 2012 for the shareholders meeting scheduled for
January 29, 2013.
Per the tender offer, the holders who surrender their notes at
or prior to 5 p.m., New York City time, on January 14, 2013 (unless
extended), will be qualified to receive the ‘Total consideration’
on the notes, indicating an early tender payment on all such
notes.
For notes tendered after the Early Tender Date but prior to 5
p.m., New York City time, on January 29, 2013 (unless extended),
holders will be eligible to receive only the applicable Total
Consideration less the applicable Early Tender Payment on the
Settlement Date.
BofA Merrill Lynch, a wing of Bank of America
Corp. (BAC), is the exclusive dealer manager and
solicitation agent for the Tender Offers and Consent
Solicitations.
We currently have a Neutral recommendation on CAG. The stock
bears a Zacks #2 (Buy) Rank, while its prime competitors HJ
Heinz Co. (HNZ) and BRF Basil Food (BRFS)
carry a Zacks #3 Rank (Hold).
BANK OF AMER CP (BAC): Free Stock Analysis Report
BRF-BRASIL FOOD (BRFS): Free Stock Analysis Report
CONAGRA FOODS (CAG): Free Stock Analysis Report
HEINZ (HJ) CO (HNZ): Free Stock Analysis Report
RALCORP HLD-NEW (RAH): Free Stock Analysis Report
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