Sara Lee Corp. may sell European division
Sara Lee Corp. jumped the most in almost four months in New York trading after the Wall Street Journal said the company may sell its European household unit for more than $2 billion.
The maker of Jimmy Dean sausages hired Goldman Sachs Group Inc. to help examine a sale, the Journal reported, citing people familiar with the matter that it didn’t name. The unit’s products account for 15 percent of Sara Lee’s sales and include Sanex deodorant and Kiwi shoe polish, the newspaper said.
Ernesto Duran, a spokesman for Sara Lee in 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 in a telephone interview.
Sara Lee rose 35 cents, or 4.8 percent, to $7.62 at 9:57 a.m. in New York Stock Exchange composite trading. Earlier, the shares jumped 6.5 percent, their biggest intraday gain since Nov. 24. They lost 26 percent 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.
“We see this is unlikely for both companies,” Nomura analysts including Alex Smith said of Reckitt and Unilever in an e-mailed note, estimating the Sara Lee unit has annual sales of $1.8 billion.
Different Interests
Reckitt, based in Slough, England, is more interested in emerging-market acquisitions, and Rotterdam- and London-based Unilever already owns brands such as Dove and Rexona, which compete with Sara Lee’s products, they wrote.
Calls to Unilever weren’t immediately returned. A spokesman for Reckitt Benckiser declined to comment.
Mike Cummins, a spokesman at Sara Lee’s headquarters in Downers Grove, couldn’t confirm whether Sara Lee hired Goldman as an adviser. He declined to comment on the possible sale.
“I’m not sure they’ve built their brands in a way that will make them hugely attractive,” Rob Mann, an analyst at Collins Stewart in London, said of Sara Lee. “Intuitively, I don’t think they will get the greatest multiple.”
Sara Lee posted a second-quarter loss last month and cut its forecast after international sales fell. It also wrote down the value of its North American drink business. Its shares have lost half their value since August.
The Journal also said Colgate-Palmolive Co. and S.C. Johnson & Son Inc. are possible bidders for the business. Nomura said Sara Lee’s brands would be a better fit with Henkel AG, though the analysts noted that the German company has said it’s not looking at acquisitions.