SARA LEE WILL BUY COURTAULDS FOR $237.8 MILLION

Byline: James Fallon

LONDON — Sara Lee Corp. Friday reaffirmed the adage that anything is available at the right price when it reached an agreement to acquire Courtaulds Textiles PLC after boosting its bid to $237.8 million.
The agreement between the two companies ends an often contentious five-week battle that analysts said allowed Courtaulds Textiles to wring more money out of Sara Lee.
The U.S. company initially bid $164.3 million on Feb. 14, but had received acceptances totaling only 0.5 percent of Courtaulds Textiles shares at the end of the first closing date of March 8.
Sara Lee Friday boosted its initial offer by 45 percent to $2.29 a share in cash, compared with $1.58 a share in cash in the first bid. Sara Lee said the offer represented a 132 percent premium over the closing price of Courtaulds Textiles shares of 98 cents on Feb. 11, the last day prior to its original bid. It is a 13 percent premium over the closing price of $2.03 on March 23.
“The acquisition will strengthen our European presence and give us access to a range of exciting market opportunities,” John Bryan, Sara Lee’s chairman and chief executive, said in a statement.
John Eccles, chairman of Courtaulds Textiles, said in the same statement that the Sara Lee offer now represented fair value for the company’s shareholders.
Sara Lee now faces the task of expanding Courtaulds Textiles in one of the toughest trading periods the textile industry has seen in a decade. While Courtaulds Textiles has withstood the downturn better than most British companies, it last month reported a 50.6 percent drop in profits after taxes and exceptional items to $12.3 million on slightly higher sales of continuing operations of $1.42 billion for the year ending Dec. 31, 1999.
The core business of Courtaulds Textiles is as a major supplier of stretch fabrics and lace to such firms as Victoria’s Secret and of private-label apparel to the U.K. retailer Marks & Spencer PLC. Sara Lee had sales of $20 billion during the fiscal year ended July 3, 1999. According to its last annual report, branded apparel accounted for 37 percent of sales and 37 percent of operating income, which was $1.9 billion excluding extraordinary items.

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