TIDMSRL
Sara Lee Corp. (Sara Lee) (NYSE: SLE) today announced that its
board of directors has unanimously approved the separation of its
international Coffee & Tea business ("CoffeeCo") from Sara Lee
Corp. The Sara Lee board has also approved a 1-for-5 reverse stock
split of shares of Sara Lee common stock to take effect immediately
after the separation. The separation will be effected as
follows:
-- A distribution of the CoffeeCo common stock will be made after market
close on June 28, 2012 (the "distribution date") to our exchange
agent
on behalf of the Sara Lee shareholders of record as of the close
of
business on June 14, 2012 (the "record date").
-- Immediately after the distribution of the CoffeeCo common stock,
CoffeeCo will pay a $3.00 per share special dividend. The
dividend
will be paid to CoffeeCo's shareholders of record as of the
time
immediately after the distribution of the CoffeeCo common stock,
which
are the Sara Lee shareholders of record as of the close of
business on
the record date.
-- After the distribution of the $3.00 special dividend, CoffeeCo will
merge with a subsidiary of D.E MASTER BLENDERS 1753 N.V., the
ordinary
shares of D.E MASTER BLENDERS 1753 will be exchanged for the
shares of
CoffeeCo common stock and all of the ordinary shares of D.E
MASTER
BLENDERS 1753 will be distributed to the CoffeeCo shareholders,
which
are the Sara Lee shareholders of record as of the close of
business on
the record date.
-- Sara Lee shareholders of record on the record date will receive one
ordinary share of D.E MASTER BLENDERS 1753 for each share of
Sara Lee
common stock they hold.
Distribution of D.E MASTER BLENDERS 1753 Shares and Special Cash
Dividend
No action is required by Sara Lee shareholders as of the record
date to receive their ordinary shares of D.E MASTER BLENDERS 1753
and the $3.00 special dividend. A prospectus containing information
regarding the procedures by which the separation will be effected
and other details of the transactions is contained in the
Registration Statement on Form F-1 (Registration No. 333-179839),
as filed by D.E MASTER BLENDERS 1753 with the Securities and
Exchange Commission (SEC) and available on the SEC's website at
www.sec.gov (the "Registration Statement").
No fractional D.E MASTER BLENDERS 1753 ordinary shares will be
distributed to Sara Lee shareholders. Instead, the amount of
fractional D.E MASTER BLENDERS 1753 ordinary shares that would
otherwise have been distributed will be aggregated and sold in the
open market, with the net proceeds distributed pro rata in the form
of cash payments to shareholders who would otherwise have been
entitled to receive a fractional ordinary share of D.E MASTER
BLENDERS 1753.
Sara Lee has received a private letter ruling from the Internal
Revenue Service that the distribution of CoffeeCo common stock and
certain related transactions will qualify as tax-free to Sara Lee,
CoffeeCo and Sara Lee shareholders for U.S. federal income tax
purposes. The private letter ruling confirms that key requirements
for tax-free treatment of the spin will be satisfied. Since, as a
policy matter, the IRS does not rule on certain elements of the
spin, at closing, Sara Lee expects to receive an opinion of counsel
that those additional elements should be satisfied and that the
distribution and certain related transactions should qualify as
tax-free to Sara Lee, CoffeeCo and Sara Lee shareholders for U.S.
federal income tax purposes. The domiciliation of the Coffee &
Tea business in the Netherlands is expected to result in U.S.
shareholders incurring U.S. tax on any gain attributable to their
CoffeeCo shares that will be exchanged for ordinary shares of D.E
MASTER BLENDERS 1753 pursuant to the merger. The Registration
Statement provides a detailed discussion on the computation of this
gain and certain other U.S. federal income tax matters in
connection with the separation on pages 53-55.
Reverse Stock Split of Sara Lee Common Stock
Immediately after the separation and prior to the market open on
June 29, 2012, Sara Lee will effect a 1-for-5 reverse stock split
of Sara Lee common stock. As a result, every five shares of Sara
Lee common stock will be converted into one share of Sara Lee
common stock.
Shareholders will not receive fractional shares in connection
with the reverse stock split. Instead, the exchange agent will
aggregate all fractional shares and sell them as soon as
practicable after the reverse stock split at the then prevailing
prices on the open market. Shareholders will receive a cash payment
from the exchange agent in an amount equal to their respective pro
rata portion of the total net proceeds of that sale.
All Sara Lee shareholders will receive their replacement shares
of Sara Lee common stock in uncertificated, book-entry form along
with a cash payment for any fractional shares. A letter of
transmittal relating to the reverse stock split will be mailed to
holders of physical certificates representing Sara Lee common stock
once the reverse stock split is effective. Holders of physical
certificates will have their replacement book-entry shares credited
to their account after they have properly completed and returned
the letter of transmittal and physical certificates. Holders of
book-entry shares will have their replacement book-entry shares
credited to their account at the effective time of the reverse
stock split. The exchange agent will mail each holder a transaction
notice reflecting such credit.
Trading of Sara Lee Common Stock and D.E MASTER BLENDERS 1753
Ordinary Shares
Shares of Sara Lee common stock will continue to trade "regular
way" on the New York Stock Exchange through the close of market on
June 28, 2012. Shares of Sara Lee common stock that trade in the
"regular-way" market will trade with an entitlement to an ordinary
share of D.E MASTER BLENDERS 1753 and the $3.00 per share special
dividend distributed pursuant to the separation. Any holders of
Sara Lee common stock who sell Sara Lee shares "regular way" on or
before the close of business on June 28, 2012 will also be selling
their right to receive ordinary shares of D.E MASTER BLENDERS 1753
and the $3.00 special dividend in the separation. Beginning on June
12, 2012 and continuing up to, and including, the distribution date
on June 28, 2012, we expect that there will also be an
"ex-distribution" market for Sara Lee common stock. Shares of Sara
Lee common stock that trade in the "ex-distribution" market will
trade without an entitlement to an ordinary share of D.E MASTER
BLENDERS 1753, without an entitlement to the $3.00 per share
special dividend distributed pursuant to the separation and will
reflect the effect of the 1-for-5 reverse stock split. On June 29,
2012, Sara Lee will begin trading "regular way" under a new name
and ticker symbol to be announced on June 5, 2012. Sara Lee
shareholders are encouraged to consult with their financial advisor
about the specific implications of trading prior to, or on, the
distribution date. Sara Lee shareholders who decide to sell their
shares before the distribution date should make sure their broker,
bank or other nominee understands whether they want to sell their
common stock with or without their entitlement to D.E MASTER
BLENDERS 1753 ordinary shares and the $3.00 special dividend
pursuant to the separation.
The ordinary shares of D.E MASTER BLENDERS 1753 are expected to
begin trading on an "as-if-and-when-issued" basis on NYSE Euronext
Amsterdam under the ticker symbol "DE" (ISIN: NL00010157558) on
June 12, 2012. If trading begins on an "as-if-and-when-issued"
basis, investors may purchase or sell D.E MASTER BLENDERS 1753
ordinary shares, but the transaction will not settle until July 9,
2012, the listing date for D.E MASTER BLENDERS 1753, when the
ordinary shares of D.E MASTER BLENDERS 1753 will begin trading
"regular way." Investors are encouraged to consult with their
financial advisers regarding the specific implications of buying or
selling D.E MASTER BLENDERS 1753 ordinary shares during the
"as-if-and-when-issued" trading period.
Completion of the separation is subject to the satisfaction or
waiver of a number of conditions, including the Registration
Statement being declared effective by the SEC, the approval of D.E
MASTER BLENDERS 1753's EU Listing Prospectus by the Netherlands
Authority for the Financial Markets (the "AFM"), the ordinary
shares of D.E MASTER BLENDERS 1753 being admitted to listing on
NYSE Euronext Amsterdam and certain other conditions described in
the Registration Statement and in the agreements filed as exhibits
to the Registration Statement. Sara Lee and D.E MASTER BLENDERS
1753 expect all conditions to the separation to be satisfied on or
before the distribution date.
Securities Legend
A registration statement relating to these securities has been
filed with the SEC but has not become effective. These securities
may not be sold, nor may offers to buy be accepted, prior to the
time the registration statement becomes effective. This release
does not constitute an offer to sell or the solicitation of any
offer to buy, and there shall not be any sale of the ordinary
shares in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction. Any offering under U.S. securities laws of the
ordinary shares of D.E MASTER BLENDERS 1753 will be made only by
means of a prospectus. When available, a copy of the prospectus may
be obtained by sending an email to investor-relations@DEMB.com or
by writing to D.E MASTER BLENDERS 1753 at: D.E MASTER BLENDERS
1753, Attn: Investor Relations, Vleutensevaart 100, Utrecht, 3532
AD, The Netherlands. In connection with the listing of D.E MASTER
BLENDERS 1753's ordinary shares on NYSE Euronext in Amsterdam, a
prospectus approved by the AFM will in due course be made available
in the same manner.
Forward-Looking Information
This press release and other documents and statements of Sara
Lee contain certain forward-looking statements, including with
respect to Sara Lee's spin-off plans. In addition, from time to
time, in oral statements and written reports, Sara Lee discusses
its expectations regarding its future performance by making
forward-looking statements preceded by terms such as "expects,"
"projects," "anticipates" or "believes." These forward-looking
statements are based on currently available competitive, financial
and economic data, as well as management's views and assumptions
regarding future events. Such forward-looking statements are
inherently uncertain, and investors must recognize that actual
results may differ from those expressed or implied in the
forward-looking statements. Consequently, Sara Lee wishes to
caution readers not to place undue reliance on any forward-looking
statements. Among the factors that could cause Sara Lee's actual
results to differ from such forward-looking statements are those
described in Sara Lee's Annual Report on Form 10-K for the fiscal
year ended July 2, 2011, as well as factors relating to:
-- Sara Lee's proposed spin-off plans and the related special dividend,
such as (i) unanticipated developments that delay or negatively
impact
the proposed spin-off and capital plans; (ii) Sara Lee's ability
to
obtain customary approvals; (iii) Sara Lee's ability to generate
the
anticipated efficiencies and savings from the spin-off including
a
lower effective tax rate for the spun-off company; (iv) the
impact of
the spin-off on Sara Lee's relationships with its employees,
major
customers and vendors and on Sara Lee's credit ratings and cost
of
funds; (v) changes in market conditions; (vi) future
opportunities
that the board of directors of Sara Lee may determine present
greater
potential value to shareholders than the spin-off and
special
dividend; (vii) disruption to Sara Lee's business operations as
a
result of the spin-off; (viii) future operating or capital needs
that
require a more significant outlay of cash than currently
anticipated;
and (ix) the ability of the businesses to operate
independently
following the completion of the spin-off;
-- Sara Lee's relationship with its customers, such as (i) a significant
change in Sara Lee's business with any of its major customers,
such as
Walmart, its largest customer; and (ii) credit and other
business
risks associated with customers operating in a highly
competitive
retail environment;
-- the consumer marketplace, such as (i) intense competition, including
advertising, promotional and price competition; (ii) changes
in
consumer behavior due to economic conditions, such as a shift
in
consumer demand toward private label; (iii) fluctuations in
raw
material costs, Sara Lee's ability to increase or maintain
product
prices in response to cost fluctuations and the impact on Sara
Lee's
profitability; (iv) the impact of various food safety issues
and
regulations on sales and profitability of Sara Lee products; and
(v)
inherent risks in the marketplace associated with product
innovations,
including uncertainties about trade and consumer acceptance;
-- Sara Lee's international operations, such as (i) impacts on reported
earnings from fluctuations in foreign currency exchange
rates,
particularly the euro; (ii) Sara Lee's generation of a high
percentage
of its revenues from businesses outside the United States and
costs to
remit these foreign earnings into the U.S. to fund Sara Lee's
domestic
operations, dividends, debt service and corporate costs;
(iii)
difficulties and costs associated with complying with U.S. laws
and
regulations, such as Foreign Corrupt Practices Act, applicable
to
global corporations, and different regulatory structures and
unexpected changes in regulatory environments overseas; and (iv)
Sara
Lee's ability to continue to source production and conduct
operations
in various countries due to changing business conditions,
political
environments, import quotas and the financial condition of
suppliers;
and
-- previous business decisions, such as (i) Sara Lee's ability to
generate margin improvement through cost reduction and
efficiency
initiatives; (ii) Sara Lee's credit ratings, the impact of Sara
Lee's
capital plans on such credit ratings and the impact these
ratings and
changes in these ratings may have on Sara Lee's cost to borrow
funds
and access to capital/debt markets; (iii) the settlement of a
number
of ongoing reviews of Sara Lee's income tax filing positions
in
various jurisdictions and inherent uncertainties related to
the
interpretation of tax regulations in the jurisdictions in which
Sara
Lee transacts business; and (iv) changes in the expense for
and
contingent liabilities relating to multi-employer pension plans
in
which Sara Lee participates.
In addition, Sara Lee's results may also be affected by general
factors, such as economic conditions, political developments,
interest and inflation rates, accounting standards, taxes and laws
and regulations in markets where Sara Lee competes. Sara Lee
undertakes no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
About Sara Lee Corporation
Sara Lee Corp. (NYSE: SLE) and its leading portfolio of food and
beverage brands, including Ball Park, Douwe Egberts, Hillshire
Farm, Jimmy Dean, Pickwick Teas, Sara Lee and Senseo, generate
nearly $8 billion in annual net sales from continuing operations
and employ approximately 20,000 people worldwide. In January, 2011,
Sara Lee Corp. announced that it will divide the company into two
pure -play publicly traded companies, one focused on the
international coffee and tea market and the other on North American
meats. For more information on the company, please visit
www.saralee.com.
Sara Lee Corp.Media (U.S.): Jon Harris, +1.630.598.8661Analysts
(U.S.): Melissa Napier, +1.630.598.8739Media (International):
Michiel Quarles van Ufford, +31.30.292.7255Analysts
(International): Robin Jansen, +31.30.292.7455
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