Ralcorp to Acquire American Italian Pasta Company; AIPC Downgraded (AIPC, RAH)

Ralcorp Holdings RAH and American Italian Pasta Company AIPC have approved a merger agreement where RAH will acquire all outstanding shares of AIPC for $53 in cash. The deal is expected to close during Ralcorp's fiscal Q4 ending Sept. 30, 2010. AIPC shares jumped over the weekend to around $52.65, while Ralcorp plummeted to around $57. BB&T Capital Markets has downgraded AIPC to Hold from Buy, since AIPC will likely hover around $53 until the merger occurs. RAL is rated Buy by BB&T.