NORTHFIELD, Ill. In a statement released Monday, Kraft Foods’ board of directors announced the company’s plan to sell-off all outstanding shares of Cable Holdco, the Kraft subsidiary responsible for the company’s Post cereals business.
Kraft announced that it had entered into a definitive agreement to distribute and merge its Post cereals into Ralcorp Nov. 15, 2007. But news of the split-off was announced in connection with the merger of Cable Holdco and Ralcorp Mailman LLC, a subsidiary of Ralcorp Holdings.
The exchange is expected to be tax-free to Kraft shareholders for U.S. tax purposes. The offer will expire at the closing date of Post/Ralcorp merger. That date should be announced in the coming weeks. The transactions face regular closing procedures one of which is approval by Ralcorp’s shareholders.
Kraft shareholders will also be granted the choice whether to exchange Kraft shares for Cable Holdco common stock, [then immediately exchanged for shares of Ralcorp common stock, just after the Cable Holdco/Ralcorp Mailman merger]. Outstanding shares of Kraft will be reduced as a consequence.
About 30.4 million shares of Cable Holdco will be offered in trade for Kraft common stock. Other conditions apply to the exchange, as well.