NORTHFIELD, Ill. (AP) -- Food maker Kraft Foods Inc. said Monday it closed an exchange offer for the sale of its Post cereals business to a subsidiary of private-label food maker Ralcorp Holdings Inc.
According to an agreement reached in November, Kraft will first split off or spin off Post and its assets to shareholders through a subsidiary named Cable Holdco. The Post cereals business will combine with Ralcorp.
In the split-off piece of the deal, Kraft said shareholders can exchange some or all of their Kraft shares and receive shares in Cable Holdco.
Shares of Cable Holdco will be exchanged for shares of Ralcorp on a one-for-one basis following the merger of Cable Holdco and a Ralcorp subsidiary.
Kraft shareholders that tendered their Kraft shares as part of the exchange offer now own 0.6606 shares of Ralcorp for each Kraft share exchanged.
Kraft said it has accepted 46.1 million common shares of Kraft for 30.5 million shares of Cable Holdco. A total of 581.3 million Kraft common shares were validly tendered.
Kraft said earnings per share will be reduced by 7 cents per share each year, when the Post cereals business is classified as discontinued operations starting in the third quarter.
Shares of Kraft fell 39 cents to $31.65 in morning trading.
