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Exchange ratio announced in merger of Procter & Gamble's Folgers into Smucker
By Lisa Kerner
Charlotte, N.C., Nov. 4 - The exchange ratio in Procter & Gamble Co.'s previously announced exchange offer is set at 1.6342 shares of Folgers Coffee Co. common stock for each share of Procter & Gamble common stock accepted in the offer.
Procter & Gamble said the exchange offer, which ends at midnight ET on Nov. 5, is being held in connection with the merger of its coffee subsidiary, Folgers, with J.M. Smucker Co.
The ratio lets shareholders exchange their shares of Procter & Gamble common stock for shares of Folgers common stock at a discount of 12% based on the average Procter & Gamble stock price ($63.7766) and average Smucker stock price ($44.3469). The averaging period began Oct. 30 and ended Nov. 3.
Based on the final exchange ratio, Procter & Gamble will accept for exchange a maximum of 38,652,878 shares of Procter & Gamble common stock.
Once the merger is complete, each share of Folgers common stock will automatically convert into the right to receive one Smucker common share, a Procter & Gamble news release said.
Procter & Gamble said the Smucker common shares issued in the Folgers merger are expected to represent approximately 53.5% of the Smucker common shares that will be outstanding after the merger.
Morgan Stanley & Co. Inc. is the dealer manager for the exchange offer.
On June 4, Procter & Gamble, a Cincinnati branded consumer goods company, said it would merge its Folgers coffee business into Smucker in an all-stock reverse Morris Trust transaction valued at about $3.3 billion, including $350 million of Folgers' debt.
Smucker manufactures fruit spreads, peanut butter, shortening and oils, ice cream toppings, sweetened condensed milk and health and natural foods beverages in North America. The company is based in Orrville, Ohio.
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