Sara Lee Corp. is making "good progress" with a plan to spin off its coffee unit and expects the split to take place by April or May, its chief executive officer said.
"Seven months from now, I want investors to buy the stock because they believe in the companies that we are creating, that we really outperform the competitive field," CEO Marcel Smits told Bloomberg News yesterday at a business event in Amsterdam. The timescale of April or May is "approximate," he said.
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The foodmaker decided to split itself up after rebuffing advances from suitors including JBS SA and a buyout group led by Apollo Global Management LLC. Sara Lee said in June it would spin off the coffee unit, reversing an earlier plan to do so with the meat business. The company owns coffee brands including Cafe Pilao and Senseo, while its meat operations include labels such as Ball Park hot dogs and Hillshire Farms lunch meat.
Sara Lee, based in Downers Grove, agreed to sell the majority of its North American coffee food-service unit to J.M. Smucker Co. last month for $400 million, while Mexico's Grupo Bimbo SAB is buying the company's North American bakeries.
"We are now sure that we will unlock value for our shareholders as a result of all the balance sheet restructuring and dispositions we're doing," Smits said. "I don't want them to buy the stock anymore because they think that we have another finance restructuring trick up on our sleeve."
Smits doesn't exclude the possibility of acquisitions in future.
"We are looking for additions to our portfolio," he said. "We've gained a reputation for being very shareholder friendly, so within that constraint we keep looking."
Sara Lee fell 2 percent to $17.80 yesterday in New York Stock Exchange composite trading. The stock has risen 25 percent in the past year.
Smits, who was named as CEO when the company announced the plan to split itself in two, declined to comment on his possible role after the spinoff has happened. "I'm very committed to making sure that the spin works out well for our shareholders and that it creates value," he said.