(Reuters) – Long-time suitor ConAgra Foods Inc finally sealed a deal to buy Ralcorp Holdings Inc for $ 5 billion to become the biggest private label food company in North America.
Ralcorp shareholders will receive $ 90 per share in cash, representing a premium of 28.2 percent to the stock’s Monday close, ConAgra said.
Ralcorp shares were trading at $ 88.50 before the bell. They closed at $ 70.23 on the New York Stock Exchange on Monday.
The deal is valued at $ 6.8 billion including debt, ConAgra said in a statement on Tuesday.
Ralcorp last year rejected several ConAgra offers, including a $ 94 per share bid that valued the company at $ 5.2 billion, and chose instead to spin off its Post cereal business.
With Tuesday’s deal, the combined market value of Ralcorp and Post Holdings Inc is about $ 6.12 billion.
Activist investor Corvex Management, Ralcorp’s largest shareholder, in August demanded that the food manufacturer either sell itself, buy another company or change its strategy after a series of earnings disappointments.
ConAgra said the deal, which was approved by the boards of both companies, will add to earnings in the first year.
ConAgra’s shares closed at $ 28.29 on the New York Stock Exchange on Monday.
(Reporting by Siddharth Cavale in Bangalore; Editing by Sriraj Kalluvila)
(This story was refiled to correct the month to August from October in the seventh paragraph)
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ConAgra to buy Ralcorp for $5 billion
