Sara Lee may split up
After rejecting 2 high-stakes bids, the company reportedly decides to pursue its own future by breaking itself up.
The company has been a hot prospect lately, receiving takeover bids from two teams. One investor group decided to drop the pursuit after seeing its $13 billion bid rejected, Reuters reported. The other team is having a hard time lining up more money.
Now it sounds like Sara Lee is going to go down its own road. Is this a legitimate decision, or is the company simply spinning this to juice up the bidding process? Perhaps a bit of both. Surely Sara Lee's board will entertain higher offers, but at the same time, it's exploring other strategies.
Investors pooh-poohed the latest news, sending Sara Lee shares down 5% to $17.60 in afternoon trading.
Post continues after video:
A split-up is "not very satisfying to those folks," one portfolio manager told Reuters. Sara Lee is "in the throes of a lot of speculators right now, hoping that someone will come along and save it," he added.
Sara Lee owns a diverse product line, including Ball Park hot dogs and Jimmy Dean breakfast foods. But the company's beverage unit may be the most attractive to outside investors, one analyst told Bloomberg. Senseo is one of Sara Lee's coffee brands.
"You have good, stable brands and abundant cash flow," the analyst added. "It would scream pretty favorably from a private-equity perspective." A leveraged buyout of Sara Lee -- at least with the numbers being passed around -- would have been the largest the industry has seen in a decade, Bloomberg calculated.
One advantage to a spin-off is that it would be tax-free, Reuters reported. After the spin-off, buyers could just purchase the stock from shareholders.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The major averages finished the Tuesday session near their lows with the Russell 2000 (-1.0%) leading the slide. The S&P 500 lost 0.5% with nine sectors ending in the red.
Equities indices started the day with modest gains and spent the first two hours of action in the neighborhood of their flat lines. Although the early trade lacked clear sector leadership, that could have been overlooked due to the strength among heavily-weighted sectors like health care (-0.3%), ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
VIDEO ON MSN MONEY
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'