Sara Lee Spinning Off Company

I love companies that spin off companies since the spun off company normally outperforms the market. Recently Sara Lee released some news indicating that they intend to do just that.

Now might be a great time to buy this stock since shareholders will automatically be getting the spun off company shares as well.

The company will pay its normal $0.12 dividend but the split will also result in a $3.00 per share cash special dividend that should be completed early in 2012.

Sara Lee’s North American retail and food services will be spun off in a tax-free manner to shareholders into a new public company. That entity will keep the Sara Lee name and will consist of the Sara Lee desserts, Jimmy Dean brands, and other popular brands.

The spun off company will include Sara Lee’s beverage and bakery units. The shares are obviously trading higher on the news but there could be much more upside of this stock.