ConAgra Foods Inc.
) made an announcement today acknowledging the receipt of the
"no-action letter" from the Canadian Competition Bureau. The
letter indicates that the Commissioner of Competition does not
intend to stand in the way of ConAgra's acquisition of
Ralcorp Holdings Inc.
), announced in late November last year. This declaration frees
the company from one of the criteria for the completion of the
In another press release, the company reported the outcome of
its cash tender offer for certain Ralcorp Notes, announced in
early January 2013. As on the early tender date, January 14,
2013, the Ralcorp Note holders tendered a total of 93.9% or
$281.7 million and 96.2% or $433.0 million of 4.950% Notes due
August 15, 2020 and 6.625% Notes due August 15, 2039,
The holders who have tendered their Notes on the above date
are eligible for an early tender premium on the amount of Notes.
However, the holders who tender their Notes after the Early
Tender period but before the Settlement date of January 29, 2013,
will be eligible to receive the Exchange Consideration only.
BofA Merrill Lynch, a wing of
Bank of America Corp.
), is the exclusive dealer manager and solicitation agent for the
Tender Offers and Consent Solicitations.
The above settlement is done in connection with ConAgra's
proposed acquisition of Ralcorp, which we believe will lead the
company to better profitability due to cost synergies. Since the
acquisition announcement date of Ralcorp, ConAgra has experienced
a 10% hike in its stock price.
We currently have a Neutral recommendation on CAG. The stock
bears a Zacks Rank #2 (Buy), while its competitors
Flowers Foods Inc.
General Mills Inc.
) carry a Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy),
BANK OF AMER CP (BAC): Free Stock Analysis
CONAGRA FOODS (CAG): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
GENL MILLS (GIS): Free Stock Analysis Report
RALCORP HLD-NEW (RAH): Free Stock Analysis
To read this article on Zacks.com click here.