Oscar Gruss Starts Sara Lee (SLE) at Hold; Brewing its Coffee and Tea Spin-off

Oscar Gruss initiates coverage on Sara Lee (NYSE: SLE) with a Hold. PT $22.50.

Analyst, Louis Meyer, said, "Following the distribution of the special cash dividend, CoffeeCo (the main U.S. subsidiary of DutchCo) will be merged into DutchCo, the shares of which will trade on the Euronext Amsterdam exchange. We anticipate DutchCo will trade at premium valuation multiples relative to branded food companies as investors focus on better margins of the coffee and tea product lines. Meatco’s financial results are subject to cost fluctuations and overall consumer confidence. Given the foreign listing, there may be an opportunity to acquire DutchCo shares at a discount from SLE holders that cannot own non-U.S. traded stocks and/or do not want direct equity-related currency exposure. The Hold rating reflects our view that SLE is trading at a rather tight 5% discount to the value of the DutchCo spin-off and recapitalized
Meatco combined."

For an analyst ratings summary and ratings history on Sara Lee click here. For more ratings news on Sara Lee click here.

Shares of Sara Lee closed at $21.26 yesterday.

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