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ConAgra Foods, Inc. (CAG - Analyst Report) announced its offer to buy certain notes of Ralcorp Holdings Inc. . These notes include any or all Floating Rate Notes due August 15, 2018, 7.29% Notes due in August 15, 2018 and 7.39% Notes due in August 15, 2020. All these notes are issued by Ralcorp.

The offer also explores the possibility of carrying out some proposed amendments to the indenture under which the notes were issued in a bid to eliminate certain covenants, restrictive provisions and events of default.

The offer takes place subsequent to the merger agreement signed on November 26, between ConAgra Foods’ Phoenix Acquisition Sub Inc., a wholly owned subsidiary of ConAgra, and Ralcorp. The agreement eventually leads to ConAgra’s acquisition of Ralcorp.

In order to fulfill at least two-thirds of Ralcorp’s outstanding shareholders’ condition to secure their approval of the merger, the company began rolling out its definitive proxy statement on December 28, 2012 for the shareholders meeting scheduled for January 29, 2013.

Per the tender offer, the holders who surrender their notes at or prior to 5 p.m., New York City time, on January 14, 2013 (unless extended), will be qualified to receive the ‘Total consideration’ on the notes, indicating an early tender payment on all such notes.

For notes tendered after the Early Tender Date but prior to 5 p.m., New York City time, on January 29, 2013 (unless extended), holders will be eligible to receive only the applicable Total Consideration less the applicable Early Tender Payment on the Settlement Date.

BofA Merrill Lynch, a wing of Bank of America Corp. (BAC - Analyst Report), is the exclusive dealer manager and solicitation agent for the Tender Offers and Consent Solicitations.

We currently have a Neutral recommendation on CAG. The stock bears a Zacks #2 (Buy) Rank, while its prime competitors HJ Heinz Co. and BRF Basil Food (BRFS - Snapshot Report) carry a Zacks #3 Rank (Hold).

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