Ralcorp Holdings to receive nearly US$900M in connection with the tax-free spin-off of its Post cereal business; Ralcorp to retain up to 20% of Post's outstanding shares

Andrew Rogers

ST. LOUIS , December 23, 2011 (press release) – Ralcorp Holdings, Inc. today announced that in connection with its previously announced plan to separate Ralcorp and the Post cereal business, Post Holdings, Inc., a wholly-owned subsidiary of Ralcorp, has filed an amendment to its Form 10 Registration Statement with the Securities and Exchange Commission ("SEC").

Ralcorp continues to make progress toward the completion of the separation, which is expected to be completed around the end of January 2012.

Under the plan announced on July 14, 2011, Ralcorp intends to execute a tax-free spin-off of the Post cereal business to Ralcorp shareholders. Upon completion of the transaction, Ralcorp will continue to be the leading producer of private-brand foods and a major producer of foodservice products, and Post will be the third largest seller of ready-to-eat cereals in the U.S. Both companies are expected to benefit by operating as pure-play independent public companies with distinct financial profiles, capital structures appropriate for their respective businesses and their own equity currencies. Ralcorp will continue to trade on the New York Stock Exchange. Post has received approval for listing on the New York Stock Exchange, subject to completion of the separation.

In connection with the separation, Ralcorp will receive approximately $900 million from Post. Ralcorp's Board of Directors intends to use these proceeds to reduce debt, aggressively pursue private-brand acquisitions and pursue additional share repurchases under the Company's remaining share repurchase authorization of approximately five million shares. In addition, Ralcorp expects to retain up to 20 percent of the outstanding shares of Post.

Completion of the separation is subject to the receipt of an Internal Revenue Service tax ruling and/or a satisfactory legal opinion as to the tax-free nature of the transaction, final approval by the Ralcorp Board of Directors, declaration of effectiveness of the Form 10 Registration Statement filed with the SEC, and other customary conditions. The transaction does not require approval from Ralcorp shareholders.

About Ralcorp Holdings, Inc.

Ralcorp produces Post branded cereals, a variety of private-brand foods sold under the individual labels of various grocery, mass merchandise and drugstore retailers, and frozen bakery products sold to in-store bakeries, restaurants and other foodservice customers. Ralcorp's diversified product mix includes: ready-to-eat and hot cereals; nutritional and cereal bars; snack mixes, corn-based chips and extruded corn snack products; crackers and cookies; snack nuts; chocolate candy; salad dressings; mayonnaise; peanut butter; jams and jellies; syrups; sauces; frozen griddle products including pancakes, waffles, and French toast; frozen biscuits and other frozen pre-baked products such as breads and muffins; frozen and refrigerated doughs; and dry pasta.

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