The Wall Street Journal reported this morning that Kraft Foods is nearing a deal to sell its Post cereals business to St. Louis-based foods producer Ralcorp Holdings for $2.8 billion. The move is part of Kraft's ongoing plan to divest itself of non-core, slower-growth divisions, a strategy that has been championed by outspoken investor Nelson Peltz, among others.

The Post division includes familiar brand names like Raisin Bran and Grape-Nuts, and is third only to General Mills (GIS) and Kellogg (K) in sales. However, concerns about marketing sugary cereals (such as Fruity Pebbles) to kids have led to some stagnation in the business's growth. The 2 firms are reportedly trying to craft (sorry) a tax-free deal by spinning off the Post division and then merging it with Ralcorp, a maneuver that would leave Kraft shareholders with some equity in the company.

It's been a rocky year for the shares of Kraft, which have endured plenty of roller-coaster activity up and down the charts as CEO Irene Rosenfeld tries to enact her turnaround plan. The stock is down about 3.3% from its year-ago levels, and investors are displaying a pessimistic bias toward KFT its Schaeffer's put/call open interest ratio of 0.83 is higher than 61% of other such readings taken during the past year, and more than 14% of the stock's available float has been sold short.