Agribusiness Investing: Will ConAgra Come to Ralcorps’ Table a 3rd Time?

While the sharp declines of silver (NYSE:SLV) and gold (NYSE:GLD) continue to steal headlines, there is a bull market going on with Ralcorp (NYSE:RAH).

Ralcorp is a growing company that has become the leading producer of private label foods, and a producer of foodservice products.  The company has grown through such acquisitions as Post Cereals in 2008, and American Italian Pasta Company in 2010.  Now, it appears that someone is looking to acquire Ralcorp, and that company is ConAgra Foods (NYSE:CAG).

Last week, we learned that Ralcorp declined an offer by ConAgra in March for $83 per share.  In March, Ralcorps’ share price traded in the mid $60s.  Today, ConAgra made another offer to buyout Ralcorp for $86 per share, all cash.  Once again, Ralcorp declined.  With the two recent buyout offers, Ralcorps’ share price has gained nearly 30% in a month, and closed at $87.39 on Wednesday.  Today’s higher closing price compared to ConAgras’ 2nd offer may be due to the fact the Ralcorps’ board has adopted a shareholder rights plan that will help reduce the possibility that a person or group could accumulate enough shares to influence future decisions.

ConAgra appears very focused on Ralcorp.  CEO Gary Rodkin said, ” Ralcorp has made significant progress with its businesses, and we are excited about the prospect of building on its number one position in private label and enhancing its iconic brands, like Post, in very important categories.”

Looks like if ConAgra wants to really get serious about Ralcorp, the next offer will need to be in the $90s per share, which will really excite shareholders and the current agricultural sector.  Other ag names such as Kraft (NYSE:KFT), Gerneral Mills (NYSE:GIS), and Kellogg (NYSE:K) all traded lower today.

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Disclosure: No positions.