Ralcorp Holdings to split into two companies

ConAgra buyout offer still stands

ST. LOUIS — Ralcorp Holdings announced that its board of directors has unanimously agreed in principle to separate Ralcorp and Post Foods in a tax-free spinoff to Ralcorp shareholders.

The company said it expects to complete the separation in approximately four to six months, following the receipt of an Internal Revenue Service tax ruling and/or satisfactory legal opinion as to the tax-free nature of the transaction, final approval by the Ralcorp board of directors and other customary conditions. The transaction does not require approval from Ralcorp shareholders. 

Upon completion of the transaction, Ralcorp shareholders will hold shares of two stand-alone, publicly traded companies: Ralcorp and Post Foods.

"The board has been carefully evaluating tax-free separation alternatives for some time," said William Stiritz, chairman of Ralcorp. "We firmly believe the separation of Post Foods from Ralcorp by way of a tax-free spin-off will unlock significant value for our shareholders. As independent companies, both Ralcorp and Post Foods will be better positioned to focus on strategies specific to their particular businesses, thereby improving the opportunities to deliver increasing shareholder value."

In response to Ralcorp’s announcement, ConAgra Foods, which reportedly offered to buy Ralcorp for $4.9 billion, issued the following statement: "We have seen the announcement from Ralcorp and we believe our proposed acquisition of all of Ralcorp continues to be in the best interests of their shareholders."

Upon completion of the separation, Stiritz will serve as chairman of Post Foods and Patrick Mulcahy, who has been appointed vice chairman of Ralcorp, will serve as chairman of Ralcorp. 

The company also announced the following management roles:

  • Dave Skarie, co-CEO and president of Ralcorp, will retire from Ralcorp effective Dec. 31. In the interim period, Skarie will be responsible for leading the separation of Post Foods from Ralcorp.

  • Kevin Hunt, co-CEO and president of Ralcorp, will assume the role of CEO and president of Ralcorp upon completion of the separation.

  • Ron Wilkinson, corporate VP and president of Ralcorp Cereal Products, will continue as corporate VP and president of Ralston Foods and Bloomfield Bakers after the separation. In addition, Wilkinson will work with Skarie on the separation of Post Foods, and he will lead the ongoing transitional relationship between the two companies. After the separation, Wilkinson will report to Hunt.

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