ConAgra Foods seeks to sell struggling private-label brands

ConAgra Foods Inc's CEO Sean Connolly yesterday said that his company plans to sell its struggling private-label business after having spent $5 billion in less than three years to buy it.

Newly-appointed CEO, yesterday said that the company would consider other strategic options to boost the company amid a decline in the packaged-food business and focus on its name-brand products, such as its Banquet and Healthy Choice frozen meals.

ConAgra, North America's biggest manufacturer of cereals, crackers and other packaged foods sold under store labels and best known for its Chef Boyardee and Slim Jim, had spent $5 billion excluding $1.8 billion debt in 2012 to buy US-based private-label food maker Ralcorp Holdings after a year-long pursuit. (See: ConAgra Foods to acquire Ralcorp Holdings for $5 billion)

It was ConAgra's seventh acquisition prior to the Ralcorp acquisition. It had earlier purchased National Pretzel Company, Del Monte Canada, Odom's Tennessee Pride, Bertolli frozen meals, the pita chip business of Kangaroo Brands and others.

Activist investor Jana Partners which is targeting ConAgra, has threatened to nominate three directors following the food company's disappointing acquisition of Ralcorp Holdings.

Jana, a hedge fund founded by Barry Rosenstein, last week disclosed a new active stake of about 7.2 per cent in ConAgra, and said in a regulatory filing that it asked the company to defer its 21 June deadline to submit nominations for its annual meeting to provide ''more time to have collaborative discussions.''

Jana, which is now the second-largest shareholder in ConAgra, started building its stake after the company wrote down the deal by $1.3 billion in March 2015.

Omaha, Nebraska-based ConAgra's private brands business posted an operating loss of $25 million due to restructuring charges.