Sara Lee stock soars on talks of possible unit sale
14 Mar 2009
Shares of consumer goods conglomerate Sara Lee Corp. jumped the most in almost four months in New York trading after The Wall Street Journal said the company might sell its European household unit for more than $2 billion.
The Journal reported in editions Friday that the Downers Grove, Illinois-based company is looking to sell its household and personal-care business in Europe, where it sells products like Kiwi shoe polish and Bloom insecticides. An article said the deal could fetch more than $2 billion and the company has hired Goldman Sachs Group Inc. to look for bidders.
Ernesto Duran, a spokesman for Sara Lee in its headquarters at Utrecht, Netherlands, declined to comment on a possible sale. ''It's our policy to always wait on any relevant matter for the business until we have something to announce and then to do it through official channels,'' he said.
Sara Lee rose 35 cents, or 4.8 per cent, to $7.62 at 9:57 a.m. in New York Stock Exchange composite trading. Earlier, the shares jumped 6.5 per cent, their biggest intraday gain since 24 November. They lost 26 per cent this year before today.
The Journal said Unilever NV, the world's second-largest consumer-products company, and Reckitt Benckiser Group Plc, the biggest maker of household cleaners, are possible buyers as Sara Lee focuses on food.
Sara Lee has been streamlining its business in recent years, including spinning off apparel maker Hanes in 2006. Food makers are shedding unprofitable businesses as they try to focus on their best-selling brands that make more money amid the economic slowdown.
As of 2006, Sara Lee Corporation has operations in more than 40 countries; sells food, beverage and household products in over 180 countries; and has some 50,000 employees worldwide. It had an income of $160 million on revenues of $13.2 billion last year.
