ConAgra Foods Reaffirms Its $94 Per Share All-Cash Proposal to Acquire Ralcorp Holdings

OMAHA, Neb., Sep 13, 2011 (BUSINESS WIRE) --

ConAgra Foods today reiterated its $94 per share, all-cash proposal to acquire Ralcorp Holdings, Inc. (NYSE: RAH). Ralcorp previously rejected this proposal, without dialogue with ConAgra Foods, on August 12, 2011.

Since August 12, ConAgra Foods has heard from many of Ralcorp's shareholders who are urging Ralcorp to enter into negotiations with ConAgra Foods based on the strength of ConAgra Foods' compelling $94 per share all-cash proposal. However, Ralcorp has continued to refuse ConAgra Foods' attempts to engage privately and hold a constructive discussion regarding the strong value, strategic logic and certainty of its proposal.

As part of ConAgra Foods' recent attempt to enter into discussions with Ralcorp, ConAgra Foods sent a presentation to Ralcorp's Board of Directors, emphasizing the superior value and certainty of ConAgra Foods' proposal. Despite repeated attempts by ConAgra Foods since its initial letter was sent to Ralcorp on March 22, 2011, Ralcorp has been unwilling to engage in discussions of any nature with ConAgra Foods. Ralcorp's Board has reiterated that it is singularly focused on pursing a separation of its businesses as announced on July 14, 2011.

ConAgra Foods continues to believe its proposal of $94 per share in cash provides present value in excess of what Ralcorp can achieve on its own, including through its announced spin-off plans. ConAgra Foods' proposal is highly attractive to Ralcorp shareholders for several reasons:

1.Compelling premium: ConAgra Foods' $94 per share proposal represents:

• a 32% premium to Ralcorp's closing price of $71.42 as of April 28, 2011, the day prior to market rumors of a transaction;
• a 44% premium to Ralcorp's closing price of $65.31 on March 21, 2011, the day prior to ConAgra Foods' initial letter to Ralcorp's Board; and
• a 32% premium to Ralcorp's closing price of $71.43 on November 13, 2008, its all-time closing high prior to ConAgra Foods' initial letter.

2.Attractive multiple: The proposal represents a multiple of 9.4x Ralcorp's adjusted EBITDA of approximately $875 million for the twelve months ending June 30, 2011. This is an attractive multiple compared to many other private label and branded food transactions.

3.Value leakage to Ralcorp shareholders from announced spin-off plan: If Ralcorp proceeds with a separation, its shareholders will face significant value leakage estimated at more than $6 per share from (i) duplicative public company costs and (ii) financing fees and expenses related to a separation.

4.Upfront, certain value in ConAgra Foods proposal vs. uncertainty and risk in Ralcorp's spin-off scenario: ConAgra Foods believes that its proposal is a more attractive alternative for Ralcorp's shareholders than Ralcorp's announced spin-off plan. The spin-off presents uncertainty and lesser value for Ralcorp's shareholders. In contrast, ConAgra Foods' $94 per share proposal would provide Ralcorp's shareholders with compelling, certain value that reflects the strength of the combined businesses and the benefit of synergies ConAgra Foods expects to achieve.

5.ConAgra Foods' interest is in the entire Ralcorp business: ConAgra Foods believes that the potential synergies from an acquisition of Ralcorp as it is configured today are greater than the synergies that would be realized in the acquisition of either of Ralcorp's businesses on their own. In the event Ralcorp refuses to negotiate, ConAgra Foods will pursue other opportunities.

6.ConAgra Foods has communicated to Ralcorp's Board its clear ability to complete a transaction: To ensure that Ralcorp's Board fully understands ConAgra Foods' ability to finance this potential transaction, ConAgra Foods shared with Ralcorp a "highly confident" letter that ConAgra Foods received from Bank of America Merrill Lynch with respect to the potential transaction. ConAgra Foods has also repeatedly communicated to Ralcorp's Board that if it were permitted to perform customary due diligence, ConAgra Foods believes it could move expeditiously toward a definitive agreement.

ConAgra Foods again requests that Ralcorp enter into a constructive dialogue around the terms and conditions of ConAgra Foods' all-cash proposal for the entire business. If ConAgra Foods and Ralcorp are not engaged in a constructive dialogue satisfactory to ConAgra Foods by 5:00pm Eastern time on September 19, 2011, ConAgra Foods will withdraw its proposal.

The presentation and "highly confident" letter referenced in this press release can be found on www.transactioninfo.com/conagrafoods.

About ConAgra Foods

ConAgra Foods, Inc., (NYSE:CAG) is one of North America's leading food companies, with brands in 97 percent of America's households. Consumers find Banquet, Chef Boyardee, Egg Beaters, Healthy Choice, Hebrew National, Hunt's, Marie Callender's, Orville Redenbacher's, PAM, Peter Pan, Reddi-wip, Slim Jim, Snack Pack and many other ConAgra Foods brands in grocery, convenience, mass merchandise and club stores. ConAgra Foods also has a strong business-to-business presence, supplying frozen potato and sweet potato products as well as other vegetable, spice and grain products to a variety of well-known restaurants, foodservice operators and commercial customers. For more information, please visit us at www.conagrafoods.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities. No tender offer for the shares of Ralcorp Holdings has been made at this time. In connection with any tender offer, if made, ConAgra Foods will file relevant materials, which may include a tender offer statement and/or other documents, with the SEC. ALL INVESTORS AND SECURITY HOLDERS OF RALCORP HOLDINGS ARE URGED TO READ ANY SUCH DOCUMENTS FILED WITH THE SEC BY CONAGRA FOODS CAREFULLY AND IN THEIR ENTIRETY, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ANY SUCH POTENTIAL TRANSACTION. Investors and security holders will be able to obtain free copies of any documents filed with the SEC by ConAgra Foods through the website maintained by the SEC at http://www.sec.gov. Copies of any such documents will also be available free of charge on ConAgra Foods' internet website at www.conagrafoods.com or by contacting ConAgra Foods' Investor Relations department at (402) 240-4157.

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on ConAgra Foods' current expectations and they include, among others, statements regarding expected synergies and benefits of a potential combination of ConAgra Foods and Ralcorp Holdings. There is no assurance that the potential transaction will be consummated, and there are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements made herein. These risks and uncertainties include the timing to consummate a potential transaction between ConAgra Foods and Ralcorp Holdings, the ability and timing to obtain required regulatory approvals, ConAgra Foods' ability to realize the synergies contemplated by a potential transaction, ConAgra Foods' ability to promptly and effectively integrate the businesses of Ralcorp Holdings and ConAgra Foods and those risks and uncertainties discussed in ConAgra Foods' filings with the SEC, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors and security holders are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this press release. ConAgra Foods does not undertake any obligation to update its forward-looking statements to reflect events or circumstances after the date of this press release.

SOURCE: ConAgra Foods, Inc.

Media:
ConAgra Foods, Inc.
Teresa Paulsen, 402-240-5210
Vice President, Corporate Communication
or
Brunswick Group
Steve Lipin / Gemma Hart, 212-333-3810
or
Analysts:
ConAgra Foods, Inc.
Chris Klinefelter, 402-240-4154
Vice President, Investor Relations
www.conagrafoods.com