Kellogg Buys Stock From Trust

The buyback is valued at $400 million.
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Cereal seller

Kellogg

(K) - Get Report

agreed to repurchase 9.4 million shares from the nonprofit W.K. Kellogg Foundation Trust for $400 million.

The Battle Creek, Mich., company will pay a price of $42.68 a share. Kellogg, which also makes Cheez-Its and Pop-Tarts, said the transaction should close Thursday.

Kellogg may repurchase an additional $400 million of its stock from the trust, if the trust asks the company to register the shares for a public offering between Feb. 1 and Dec. 31, 2006.

All told, the trust might sell as much as $1.05 billion of Kellogg stock by the end of next year, including possible open-market sales of up to $250 million of the company's shares.

Shares of Kellogg were adding 9 cents to $44.04 Wednesday.