Packaging
Kraft Foods Announces Intention to Split-Off Post Cereals Business
Tuesday 17. June 2008 - The Board of Directors of Kraft Foods Inc. (NYSE:KFT) today announced its intention to distribute via a split-off transaction all of the outstanding shares of Cable Holdco, Inc., a wholly owned subsidiary of Kraft that will own certain assets and liabilities of the Post cereals business.
The split-off transaction is in connection with the merger of Cable Holdco and Ralcorp Mailman LLC, which is a subsidiary of Ralcorp Holdings, Inc. (NYSE:RAH). As previously announced, Kraft entered into a definitive agreement on November 15, 2007, to distribute and merge its Post cereals business into Ralcorp.
The exchange is expected to be tax-free to participating Kraft shareholders for U.S. federal income tax purposes. The exchange offer will expire on the closing date of the merger of the Post cereals business and Ralcorp, which will be announced at a later date. The transactions are subject to customary closing conditions, including Ralcorp shareholder approval.
In this split-off transaction, Kraft shareholders will have the option to exchange some or all of their shares of Kraft common stock and receive shares of Cable Holdco common stock, which will immediately be exchanged for shares of Ralcorp common stock following the merger of Cable Holdco and Ralcorp Mailman. As a result of the exchange offer, the number of Kraft’s outstanding shares will be reduced.
Terms of the exchange will be announced at the commencement of the exchange offer.
Approximately 30.4 million shares of Cable Holdco will be offered in exchange for Kraft common stock in the offer, subject to adjustments in certain circumstances. The exchange offer will be subject to proration if the offer is over-subscribed, and the number of shares Kraft accepts in the exchange offer may be less than the number of shares tendered.
If the exchange offer is consummated but not fully subscribed, then the additional shares of Cable Holdco common stock owned by Kraft will be distributed as a pro rata dividend to Kraft shareholders and to holders of Kraft’s deferred stock awards.