I own shares of Kraft KFT They sent a packet and asked me for my position? Are they <span title="merging/selling/splitting?">merging/selling/splitting...</span>

Question

What are they asking for and what should I do?

Answer 1

I got the same packet.  I didn&#039;t read it, only glanced through page one and figured out that it was a trade in of shares of Kraft for shares of a smaller company.  If you read the information, it should tell you exactly what they are offering.  Frankly, I&#039;d rather keep my Kraft shares.

Answer 2

They want to split off the &#039;Post&#039; cereals part from the rest of Kraft, following which the &#039;Post&#039; part will turn around and merge with Ralcorp.

Check here for details: http://www.kraft.com/Investor/stock/Post...

You have a choice to get some stock in the spinoff, or not.  Spinoffs are usually good investments but of course it All Depends...

Answer 3

This is a really difficult one to explain.  Kraft is giving you an option to exchange your KFT shares for shares of RAH.  For each share of KFT you can receive  0.6613 share of RAH.  Depending on the total number of shares of KFT offered in the exchange,  you may not receive the entire amount you offer.  The limit is 30.5 million shares of RAH.  The only possible advantages of the offer is 1.  you will receive a 10% average discount in the shares of RAH from the average market price and 2. you will possibly diversify your portfolio some.  This all comes about because KFT is divesting its Post cerial business.  The whole thing is very complicated, but that is the bottom line.  Now RAH is currently a small company with a very small market cap.  They will be larger when they pick up the Post cerial business, but still relatively small.  The big question is why does KFT want to get rid of it.  Obviously because it is not up to snuff.

I can not advise you on what you should do.