Sara Lee (SLE) has said that they will be giving a $3 a share dividend at the end of this month, along with splitting the company up, exchanging SLE shares for the new CoffeeCo shares, and doing a 1 for 5 reverse split. What does this mean for a common investor? If I have 1,000 shares of SLE what will I end up with after all is said and done?
You will get a $3 dividend (from Coffee Co.) and 200 shares of SLE and shares of Coffee Co . Splits normally do nothing for the company, except you have more or less shares of a company (in your case less). I read about this and it seems a little complex about what will happen after the split but none the less it seems as if Sara Lee is simply splitting off its Coffe and Tea business as it sees that it may be more valuable on its own. The split will devalue SLE current holdings but give you the share holder shares of the international coffee and tea business. Find out more here: http://www.streetinsider.com/Mergers+and+Acquisitions/UPDATE%3A+Sara+Lee+%28SLE%29+Approves+Spin-Off+of+International+Coffee-Tea+Unit%2C+1-for-5+Reverse+Split%2C+%243Share+Special+Dividend/7484870.html They expect both companies to pay a dividend and have high investment grade ratings. In summary here is what you will get 200 SLE shares, 1000 Coffee Co shares, and a $3 per share dividend from Coffee Co. I hope this helps!