Topic: Growth Stocks

Wall Street Stock Forecaster Hotline – Friday, May 6, 2011

Article Excerpt

CONAGRA FOODS INC., $25.17, New York symbol CAG, has offered to buy Ralcorp Holdings Inc. (New York symbol RAH), which makes a variety of private-label packaged foods, such as crackers, cookies, jams, peanut butter and frozen waffles. Ralcorp also makes cereals under the well-known Post brand. Buying Ralcorp would make ConAgra the third-largest packaged food maker in the U.S. It would also help ConAgra profit from rising demand for private-label products, which now account for 18.9% of U.S. food sales, up from 16.4% five years ago. Following the purchase, ConAgra would get 50% of its sales from branded foods, 25% from private-label products, and 25% from selling food to restaurants. The company feels its can save $250 million a year by combining plants and other overlapping operations. ConAgra is offering $86.00 a share for Ralcorp, for a total of $4.9 billion. It will also assume $2.5 billion of Ralcorp’s debt. This is a major purchase for ConAgra, which has a market cap…