Ralcorp Board's Merger Rejection Doesn't Hold Milk

St. Louis-based Ralcorp (RAH-$77.00) has repeatedly spurned buyout offers from ConAgra, opining it could best unlock shareholder value by spinning off its Post Foods division - brands like Honey Bunches of Oats, Grape Nuts and Fruity Pebbles - from its private label (store brand) and ready-to-eat foodstuffs.

Considering the $94 a share purchase price was higher than Ralcorp has ever traded at, it is hard to fathom why senior management failed to endorse ConAgra’s offer, especially given the personal payday that awaited each of them under “change-in-control” clauses contained in their respective employee agreements. In a buyout, co-chief executives Kevin Hunt and David Skarie each stood to pocket, at a minimum, $15 million (including $3.7 million in accrued salaries and cash bonuses, and in excess of $6 million in stock awards). Chief financial officer Thomas Granneman left more than $5 million on the table, too (including $3 million in three-years worth of salary and average annual cash bonuses, and more than $2 million in stock awards). Furthermore, actual payouts to named executives would have been significantly higher, as these severance packages were based on the closing price of Ralcorp on September 30, 2010 ($58.48 a share), according to the 2011 proxy statement.

Read more at 24/7 Wall Street: Poor Judgement By Ralcorp's Board

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

Donut Holes in Dunkin Brands' Books

The asset side of Dunkin’ Brands’ (DNKN-$26.86) balance sheet is bloated, with 55% of total assets, or $1.7 billion, nothing more than intangibles (like franchise “rights” and trade names). Additionally, strip out restricted cash of $73.6 million (escrowed for franchisee advertising and gift-card programs), and working capital slips into jelly red by some $60 million.

Read more: Dunkin’ Donuts Problems Rise - 24/7 Wall St.

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

Ground Zero: In Flanders Fields Remembered

In Flanders fields the poppies blow
Between the crosses, row on row,
That mark our place; and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.

We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie
In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields. ~ John McCrae (1872 - 1918)

Image: Courtesy of Christine Morgan Designs

The More Fashions Change at Talbots....

In yet another reboot, actress Julianne Moore, 51, will be the new face of yet another splashy ad campaign over at The Talbots Inc (TLB-$2.53).

Constant brand tinkering has also blurred the “classic” clothing that Talbots is known for, and turned off traditional customers - just look at trailing 12-month operating metrics (ending January 2011): revenue growth was off 1.8% (compared to average gain of 5.9% in apparel industry); gross margin of 29.2% trailed industry average by 630 basis points; and, net operating margin was an anemic (1.0) percent, compared to an apparel industry gain of 3.6 percent, according to Thomson Reuters data.

How much “Bling! Bling!” is left on the apparel retailer's balance sheet?

Read more: Talbots Revamps Its Image - 24/7 Wall St.

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.