ConAgra's bid for Ralcorp valued the maker of cookies and pasta in the "low-$80s" per share, says a source with knowledge of the discussions. That would have made the premium just north of 25 percent, compared to where the shares were trading, the source noted.
The offer, a mix of stock and cash, was sent in March, and was not intended to be hostile, the source said.
ConAgra executives were aware that Ralcorp was also in fluid discussions with Apollo Global Management , which could have caused them to jump the gun on making a formal offer.
A Bloomberg report said Apollo was still seeking an investment in Ralcorp and had planned to meet the latter's management this week.
Last night, Ralcorp accompanied pre-announced earnings with a press release acknowledging the proposal from a third party, and the board’s unanimous decision to reject it.
“The board of directors of Ralcorp has a high level of confidence in the management team and in the future prospects of Ralcorp,” the press release said, quoting Ralcorp’s chairman, William Stiritz. “We have not met, and are not in discussions, with any third party regarding the sale of the company.”
A second source noted that not entertaining “any” third party offer would include Apollo as well, and both sources believed no talks were currently ongoing with either party.
Apollo reportedly had been working with food exec C. Dean Metropoulos to find deals in the consumer sector, and the firm had bid alongside TPG Capital and Bain Capital for control of Sara Lee.
In late January, Sara Lee management chose to split the company’s businesses instead.