San Diego, Sept. 20, 2011 (Shareholders Foundation) -- An investor in Ralcorp Holdings, Inc. (NYSE: RAH) shares filed a lawsuit against the board of directors of Ralcorp Holdings in connection with their decision to reject the offers made by ConAgra Foods.
According to the complaint the plaintiff alleges that the defendants breached their duty to shareholders by rejecting buyout offers from ConAgra Foods at well above market value. The plaintiff alleges that the Ralcorp's Board of Directors has repeatedly and unreasonably refused to even discuss a potential transaction with ConAgra in spite of numerous premium offers for all of the outstanding company shares and instead, Ralcorp has erected barriers to any unsolicited takeover, and hastily and belatedly created and introduced its own plan to break up the company.
Shares of Ralcorp Holdings, Inc. (Public, NYSE:RAH) rose from as low as $49.18 per share in 2008 to as high as over $90 per share in May 2011 after on May 04, 2011 06:00, ConAgra Foods, Inc. (NYSE:CAG) announced that it has made a proposal to the Ralcorp Holdings, Inc. Board of Directors (NYSE:RAH) to acquire Ralcorp for $86 per share in cash, or approximately $4.9 billion, plus the assumption of $2.5 billion in debt.
ConAgra Foods, Inc said the all-cash proposal to acquire all outstanding common shares of Ralcorp represented a premium of 31.7% to Ralcorp’s closing price on March 21, 2011, the day before an initial $82 proposal in cash and stock was sent to Ralcorp by ConAgra Foods; a 24.9% premium to Ralcorp’s one-month average closing price as of April 28, 2011, the day prior to recent speculation in the press; and a 20.4% premium to Ralcorp’s closing price on April 28, 2011, which was also the stock’s 52-week closing high as of that date.

However the same day Ralcorp Holdings, Inc. (NYSE: RAH) announced that its board of directors has unanimously determined that the unsolicited non-binding proposal by ConAgra Foods (NYSE: CAG) is not in the best interests of shareholders.

On Sept. 13, 2011 ConAgra Foods said it reiterated its $94 per share, all-cash proposal to acquire Ralcorp Holdings, Inc. (NYSE: RAH). Ralcorp Holdings previously rejected this proposal, without dialogue with ConAgra Foods, on August 12, 2011. ConAgra Foods said it has heard from many of Ralcorp's shareholders who are urging Ralcorp to enter into negotiations with ConAgra Foods based on ConAgra Foods' $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, so ConAgra Foods. It also said that as part of ConAgra Foods' recent attempt to enter into discussions with Ralcorp, it even sent a presentation to Ralcorp Holdings’ Board of Directors, emphasizing the value and certainty of ConAgra Foods' proposal. Nevertheless, so ConAgra Foods, despite repeated attempts by ConAgra Foods since its initial letter was sent to Ralcorp Holdings on March 22, 2011, Ralcorp Holdings has been unwilling to engage in discussions of any nature with ConAgra Foods and Ralcorp Holdings' Board has reiterated that it is singularly focused on pursing a separation of its businesses as announced on July 14, 2011.

On September 14, 2011, a news outlet published a story entitled “Ralcorp Board Costing Investors $1 Billion in ConAgra Opposition.’ Citing an analyst the media report stated that “ConAgra’s current offer is a starting point for negotiations, which may result in an offer of as much as $104 a share”.

Then on September 19, 2011, Ralcorp Holdings, Inc. (NYSE: RAH) announced that its Board of Directors has met again to consider the unsolicited, non-binding proposal from ConAgra Foods (NYSE: CAG) to acquire Ralcorp for $94.00 per share in cash and that the Board has again reiterated its rejection of ConAgra's proposal to acquire Ralcorp and determined not to enter into negotiations with respect to that proposal.

Following Ralcorp Holdings’ announcement ConAgra Foods said the same day that it withdraws its $94 per share, all-cash proposal to acquire Ralcorp Holdings, Inc. (NYSE: RAH).

Since May 2011 NYSE RAH shares fell from over $90 to as low as $75.23 during September 19, 2011.