Ralcorp board approves Post cereals spin-off
The company said its board had approved the split on Tuesday, and it expects to complete the tax-free separation on January 30, by distributing at least 80% of Post shares, with every Ralcorp shareholder to receive one Post share for every two shares they hold in Ralcorp. About 34.5m shares are expected to remain outstanding after the separation.
Chairman of Ralcorp’s board of directors William Stiritz said in a statement: “We are pleased with the progress of our separation plans for Ralcorp and Post. The separation will enable both companies to focus on their respective business strategies, while allowing investors to select discrete themes in terms of branded and private-brand foods.
"The Board's actions reflect our confidence in the underlying strengths of these companies and their ability to create value for shareholders."
Stiritz will become chairman of Post Holdings’ board of directors following the transaction, while J. Patrick Mulcahy is due to assume the position of chairman of the board for Ralcorp Holdings.
Ralcorp bought the Post cereals business from Kraft Foods in November 2007 for $1.65bn, and assumed $950m-worth of debt, bringing the total value of the transaction to $2.6bn.
Ralcorp announced in July last year its intention to separate its Post business, creating two separate companies – Ralcorp to focus on its private label products, and Post to continue its focus on branded cereals, particularly Honey Bunches of Oats, which the company says has over $380m in annual sales.
