US food maker Ralcorp Holdings has turned down ConAgra Foods’ US$4.9bn takeover bid for the business.

Ralcorp, which makes cereals under the Post brand as well as private-label foods in a number of categories, said yesterday (4 May) that ConAgra’s offer was “not in the best interests of shareholders”.

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The all-cash proposal was ConAgra’s second move to buy Ralcorp and values the company at $86 a share. In March, ConAgra made an offer worth $82 a share.

ConAgra claims that the offer represents a “compelling premium” for Ralcorp shareholders.

However, Ralcorp chairman William Stiritz said his company had a “proven track-record” of “delivering superior results and shareholder value” and would continue to generate returns for investors.

“Ralcorp, as an independent company, has a proven track record of delivering superior results and shareholder value, having delivered total shareholder returns of 418% over the past 10 years and 114% over the past five years,” Stiritz said. “We are confident that Ralcorp has a strategic plan and a proven management team that will continue to generate significant shareholder value in the future. Our board of directors affirms its commitment to Ralcorp as an independent company.”

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In a further move, Ralcorp has drawn up a shareholder rights plan to reduce the likelihood that any group could gain control of the company by buying shares on the open market “without paying a control premium for all shares”, the company said.

The food manufacturer’s board set the trigger point for the so-called “poison pill” at 10%. Were ConAgra – or any other investor – to acquire a stake of that size on the open market, Ralcorp would then flood the market with new shares, resulting in a massive dilution of any unwanted acquirer’s stake.