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The New York Times reports that ConAgra upped its unsolicited bid to acquire Ralcorp Holdings to $4.9 billion, a two-dollar-per-share increase from the previous proposal that was rejected by Ralcorp - and was rebuffed by Ralcorp yet again.

Ralcorp said that the offer did not make sense for its investors.

According to the Times, now “ConAgra will have to decide whether to make a hostile play for the food manufacturer and take the offer directly to Ralcorp’s shareholders. Investors who own both companies have already expressed interest in a tie-up, according to a person close to ConAgra who was not authorized to talk publicly.”

Bloomberg writes, “Purchasing Ralcorp would allow ConAgra Chief Executive Officer Gary Rodkin to almost quadruple sales of store-brand foods, a market that has grown as some cash-strapped shoppers trade down. Ralcorp, split from Ralston Purina Co. almost 20 years ago, generated about $3 billion last year from selling cereals, cookies and pasta under retailers’ own brands.”

Rodkin told analysts, “We think this is a business that aligns well with ConAgra Foods’ strategic priorities and capabilities.”

But the Ralcorp chairman, William Stiritz, demurred. “Ralcorp, as an independent company, has a proven track record of delivering superior results and shareholder value.”
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