ConAgra Selling Trading Operations

NEW YORK - Mar 27/08 - SNS -- ConAgra Inc. will sell its ConAgra Trade Group trading and merchandising operations to the Ospraie Special Opportunities fund and other investors for U.S. $2.1 billion, subject to certain adjustments. ConAgra Trade Group will be renamed Gavilon LLC upon completion of the sale.

Under the terms of the agreement, ConAgra Foods will sell the operations of ConAgra Trade Group, also known as the company's Trading and Merchandising segment, in exchange for approximately $1.6 billion in cash, subject to working capital fluctuations, and $525 million (face value) of payment-in-kind debt securities of a newly created Gavilon holding company. The weighted average interest rate on the debt securities is 10.82%. The final purchase price will be adjusted based on working capital changes subsequent to Feb. 24, 2008. In addition, ConAgra Foods will receive a contingent right to a portion of future earnings during the remainder of calendar 2008 and a warrant exercisable for 8% of the equity of the purchaser.

Additional details of the transaction include:

-- Select trading and merchandising personnel dedicated to buying key commodities used in ConAgra Foods' products and for its operations will become part of ConAgra Foods' enterprise procurement function. Dedicated personnel will continue to monitor the value at risk and risk limits associated with the ongoing procurement needs of ConAgra Foods.

-- Given the large working capital requirements for the Trading and Merchandising segment's operations in recent periods, the company is expecting lower and more predictable ongoing working capital requirements for ConAgra Foods following completion of the sale. Over time, this should result in more consistent operating cash flows. ConAgra Foods intends to continue to use share repurchases as the benchmark for its capital allocation decisions.

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