Corvex Management LP Raises Stake in Ralcorp Holdings, Inc. (RAH) to 5.13%, Seeks Sale of Company
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In a 13D filing on Ralcorp Holdings, Inc. (NYSE: RAH), hedge fund Corvex Management LP disclosed a 5.13%, or 2,835,296 share, stake in the company. This is up 367.00% from the 607,124 shares held at the end of the latest quarter ending June 30, 2012.
Corvex said the company should pursue three alternatives to enhance stockholder value: 1) a sale of the company, 2) a merger with another food company to take advantage of economies of scale and cost synergies or 3) a “self-help” strategy with new investor board representation and a renewed focus on execution, accretive acquisitions and efficient capital allocation
From the filing:
he Reporting Persons acquired the Shares in the belief that the Shares are undervalued and are an attractive investment. The Reporting Persons have had meetings and conversations with management of the Issuer to discuss the Issuer’s operations, strategy, and governance and will seek to have additional conversations with one or more of the Issuer’s management, members of the Issuer’s board, other stockholders of the Issuer and other persons to discuss the Issuer’s business, strategies, potential value enhancing actions or transactions and other matters related to the Issuer. The Reporting Persons believe that the Issuer has a strong competitive position in an attractive industry with secular growth tailwinds but that poor execution has prevented the Issuer’s shares from reflecting full value. The Reporting Persons intend to discuss with one or more of the persons referenced above, among other topics, the Issuer’s performance since rejecting ConAgra’s acquisition offer last year. Specifically, the Reporting Persons believe that the “status quo” is unacceptable and the Issuer should immediately pursue three alternatives to enhance stockholder value: 1) a sale of the company, 2) a merger with another food company to take advantage of economies of scale and cost synergies or 3) a “self-help” strategy with new investor board representation and a renewed focus on execution, accretive acquisitions and efficient capital allocation. The Reporting Persons intend to express their concern that the Issuer has had several serious execution issues since the Post separation including disappointing earnings, inability to file quarterly financials on a timely basis and poor communication with investors and analysts.
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Corvex said the company should pursue three alternatives to enhance stockholder value: 1) a sale of the company, 2) a merger with another food company to take advantage of economies of scale and cost synergies or 3) a “self-help” strategy with new investor board representation and a renewed focus on execution, accretive acquisitions and efficient capital allocation
From the filing:
he Reporting Persons acquired the Shares in the belief that the Shares are undervalued and are an attractive investment. The Reporting Persons have had meetings and conversations with management of the Issuer to discuss the Issuer’s operations, strategy, and governance and will seek to have additional conversations with one or more of the Issuer’s management, members of the Issuer’s board, other stockholders of the Issuer and other persons to discuss the Issuer’s business, strategies, potential value enhancing actions or transactions and other matters related to the Issuer. The Reporting Persons believe that the Issuer has a strong competitive position in an attractive industry with secular growth tailwinds but that poor execution has prevented the Issuer’s shares from reflecting full value. The Reporting Persons intend to discuss with one or more of the persons referenced above, among other topics, the Issuer’s performance since rejecting ConAgra’s acquisition offer last year. Specifically, the Reporting Persons believe that the “status quo” is unacceptable and the Issuer should immediately pursue three alternatives to enhance stockholder value: 1) a sale of the company, 2) a merger with another food company to take advantage of economies of scale and cost synergies or 3) a “self-help” strategy with new investor board representation and a renewed focus on execution, accretive acquisitions and efficient capital allocation. The Reporting Persons intend to express their concern that the Issuer has had several serious execution issues since the Post separation including disappointing earnings, inability to file quarterly financials on a timely basis and poor communication with investors and analysts.
For more notable holders of Ralcorp Holdings, Inc. stock click here.
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