Post says it will also pay accrued and unpaid interest on the notes. The buy-back offer expires at 5 p.m., Oct. 5. Wachovia Securities and Merrill Lynch & Co. are the dealer managers for the offer. Post filed its buy-back offer with the Securities and Exchange Commission.

The purchase price for each $1,000 principal amount of notes will be "the price resulting from a yield to maturity on the notes, equal to the sum of a fixed spread of 20 basis points, and the yield based on the bid price on the 1 ¼% US Treasury Notes due May 31, 2005," according to the Post statement.

If favorable market conditions exist at the offer's settlement date, Post may decide to finance all or a portion of the purchase price of the notes with the proceeds of an offering of new notes, the company says. However, if favorable market conditions are not in place, Post "expects to borrow funds under its unsecured revolving credit facility to pay the purchase price for the notes, plus accrued and unpaid interest," according to the Post statement.