UPDATE: ConAgra Foods makes $4.9B bid for Ralcorp; Trading ~6% Higher (RAH)

ConAgra Foods Inc. made a $4.9 billion bid for cereal maker Ralcorp Holdings

in an effort to broaden its business making store-brand products. The $86-per-share bid tops a previous bid of $82 that Ralcorp rejected, ConAgra said. It is a 3.2 percent premium over Ralcorp's Tuesday closing stock price of $83.33. Ralcorp's stock rose $5.48, or 6.6 percent, to $88.81 in Wednesday trading, while shares of ConAgra added 93 cents, or 3.8 percent, to $25.68. ConAgra, whose brands include Chef Boyardee and Slim Jim, said Wednesday it had initially made an $82 cash-and-stock offer in March that Ralcorp rejected. Ralcorp disclosed the existence of an offer on Monday. Closing the deal would make ConAgra the third-largest packaged food maker in the U.S. Jonathan Feeney of Janney Capital Markets said in a client note that moving to an all-cash offer was likely an attempt by ConAgra to make the proposal more attractive. But the $86-per-share offer is still below Feeney's $98-per-share estimate for Ralcorp.