insane dividends

[wzebra33]

Sara Lee Corp. said this morning it will divide itself two publicly traded companies. The plan, which has been approved by Sara Lee’s board, divides the company into North American and European divisions.

Sara Lee’s North American retail business, which includes its sausage and cheesecake and its North American foodservice business, will keep the Sara Lee name, and have an estimated $4.1 billion in annual revenue.

The second company, yet to be named, will consist of its international beverage business, which makes Senseo and Douwe Egberts coffees, and its international bakery business, which makes bread. The company will have an estimated $4.6 billion in annual revenue.

Sara Lee will also issue a $3 special dividend to shareholders.

The separation is expected to be completed by the end of this calendar year or early 2012.

“We have carefully considered various strategic alternatives, including unsolicited indications of interest in the company,” James Crown, Sara Lee’s chairman of the board, said in a statement. “We believe that the spin-off, plus the one-time special dividend, offers the greatest potential for delivering long-term shareholder value.”

Crown added that the two companies “will have their own distinct growth strategies within their respective core markets that will attract a more focused shareholder base.”

No information was immediately available as to what this means for the company’s 1,000 Chicago-area employees. The company will provide additional information during a Web cast with investors at 9 a.m.

This decision caps off months, and even years, of speculation about the dissolution of Sara Lee, which once sold everything from pantyhose, bug spray, undershirts to purses and bread, in addition to coffee, sausage and cheesecake. In recent months, the company has announced or completed a handful of sales that leaves a company essentially focused on North American packaged meat and European coffee.

Speculation that the company was on the brink of accepting a buyout offer has brought Sara Lee stock to a series of consecutive 52-week highs since December. Reports that the company had turned away suitors began taking a toll on stock Wednesday.

The company also announced a number of executive appointments.

Jan Bennink, 54, will serve as executive chairman, effective immediately. Bennick will be responsible for leading and implementing the spin-off. Crown will stay on as a board member and lead independent director.

Marcel Smits, 49, will serve as chief executive officer. He has been standing in as interim CEO since Brenda Barnes left in May.

Mark Garvey, 46, will serve as the company’s chief financial officer, and CJ Fraleigh, 47, currently CEO, North America, will head the new North American Retail and Foodservice business following the spin-off.
http://chicagobreakingbusiness.com/2011/01/sara-lee-announces-plans-to-split-in-2.html