Kraft begins exchange offer in Post cereal split-off

By Lisa Kerner

Charlotte, N.C., June 25 - Kraft Foods Inc. began an exchange offer related to the split-off of its Post cereals business.

The split-off is in connection with the merger of Kraft subsidiary Cable Holdco, Inc. and a subsidiary of Ralcorp Holdings, Inc., a Kraft news release said.

In November 2007, Kraft agreed to distribute and merge its Post cereals business into Ralcorp.

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 in the split-off transaction.

According to Kraft, the exchange offer lets shareholders exchange their shares of Kraft common stock for shares of Cable Holdco common stock at a 10% discount to the per share value of Ralcorp common stock, subject to a limit of 0.6613 shares of Cable Holdco common stock per Kraft share.

The Cable Holdco common stock will then be exchanged for shares of Ralcorp common stock on a one-for-one basis following the merger of Cable Holdco and a Ralcorp subsidiary, the release stated.

The exchange offer is expected to be tax-free to participating Kraft shareholders and will expire at 8 a.m. ET on Aug. 4.

Approximately 30.5 million shares of Cable Holdco will be offered in exchange for Kraft common stock.

Kraft Foods is a Glenview, Ill., food and beverage company.

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