Ralcorp Holdings Inc. (RAH) investor Corvex Management LP said the maker of Raisin Bran cereals should pursue three alternatives to boost shareholder value, including a merger with another food company.
Corvex acquired a 5.1 percent stake in St. Louis-based Ralcorp and said the company should also consider putting itself up for sale or embark on a new strategy focusing on takeovers, according to a regulatory filing today.
Ralcorp, which sells cookies and pasta under retailers’ own brands, rejected a $5.18 billion takeover bid from ConAgra Foods Inc. (CAG) last year, saying it would spin off its Post Foods unit instead and focus on private-label goods. In May, Ralcorp said it would restate results for fiscal 2011 and first quarter of 2012 after understating an impairment charge related to the spinoff of Post, which occurred in February.
Corvex, based in New York, said the “status quo is unacceptable” and Ralcorp has had “several serious execution issues since the Post separation including disappointing earnings.”
Matt Pudlowski, a Ralcorp spokesman, didn’t immediately return a phone call seeking comment.
Ralcorp rose 2.4 percent to $70.02 at 10:22 a.m. in New York. The shares had dropped 5.7 percent this year through yesterday.
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