ConAgra Foods Announces $900 Million Accelerated Share Repurchase Program

Under the agreements, ConAgra Foods will prepay a total of $900 million ($450 million to each of MLI and BofA) on July 1, 2008 for shares of the company's common stock to be purchased from MLI and BofA.

02/07/08 ConAgra Foods, Inc., one of North America's leading packaged food companies, initiated an accelerated share repurchase program (ASR) under which the company will spend $900 million to repurchase shares of its common stock. Reflecting previously announced plans, the ASR will be funded with a portion of ConAgra Foods' proceeds from the recently completed sale of its Trading and Merchandising segment. When the ASR is completed, the company's current share repurchase authorization will be complete. Affiliates of Merrill Lynch International (MLI) have advised ConAgra Foods with respect to the program.

The ASR will be completed under separate agreements with MLI and Bank of America, N.A. (BofA). Under the agreements, ConAgra Foods will prepay a total of $900 million ($450 million to each of MLI and BofA) on July 1, 2008 for shares of the company's common stock to be purchased from MLI and BofA. The number of shares to be purchased under each agreement (subject to agreed upon minimum and maximum numbers of shares in each agreement) will be determined by dividing the $450 million purchase price in each agreement by the arithmetic mean of the volume-weighted average prices of shares of ConAgra Foods' common stock in a valuation period, less a discount. The valuation period applicable to each agreement will begin following the completion of a hedging period, during which MLI and BofA will establish initial hedging positions in respect of their obligations under the ASR. The valuation period under each agreement continues until the associated repurchase is completed. The company will receive an aggregate of 32,676,350 shares on the July 1, 2008 prepayment date and will receive the balance of the minimum number at the end of the hedging period. It will receive any additional repurchased shares at the end of the valuation period, which will occur during the fourth fiscal quarter of 2009.

ConAgra Food's outstanding shares used to calculate earnings per share will be reduced by the number of shares repurchased as they are delivered to the company, and the aggregate $900 million purchase price will be recorded as a reduction in stockholders' equity upon its prepayment.

The ASR agreements are subject to terms customary for similar agreements, including provisions permitting adjustments to the length of the valuation and hedging periods, providing for the effect of extraordinary corporate transactions, and setting forth other circumstances under which the agreements may be terminated.