Newspaper article The Florida Times Union

Flowers Industries Announces Restructuring

Newspaper article The Florida Times Union

Flowers Industries Announces Restructuring

Article excerpt

********** CORRECTION November 1, 2000

Analyst Robin Murchison of Hibernia Southcoast Capital projects Stein Mart to earn 89 cents a share in 2000 and $1.06 a share in 2001, and analyst Elizabeth Pierce of Wedbush Morgan Securities projects the company to earn 85 cents a share in 2000 and $1.03 in 2001.

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Along with its agreement last week to sell its 55 percent stake in Keebler Foods Co. to Kellogg Co., Flowers Industries Inc. also announced a corporate restructuring.

Thomasville, Ga.-based Flowers plans to create a new company called Flowers Foods Inc. that will consist of its remaining businesses, Flowers Bakeries Inc. and Mrs. Smith's Bakeries. Stockholders of Flowers Industries will receive shares of Flowers Foods and the stock will continue to trade on the New York Stock Exchange under its current ticker symbol, "FLO."

Apparently, the only difference between Flowers Industries and Flowers Foods will be the sale of Flowers' interest in Keebler. Flowers spokeswoman Mary Krier said she could not give more details about the restructuring until the company files its proxy materials later this year. Flowers shareholders will be asked to approve the moves.

Kellogg is buying Keebler for $42 per Keebler share. Flowers owns about 46.2 million shares of Keebler, making the deal worth $1.94 billion to Flowers.

Flowers has about 100 million shares outstanding, meaning the deal is valued at $19 a share to Flowers' stockholders, which is about equal to the company's recent stock price. Flowers estimates it will pay $12.50 per share in cash to stockholders once the deal is complete "after deducting certain liabilities at Flowers."

Flowers' stock fell $2.31 to $16.25 Thursday when the deal was announced.

The Keebler investment has been one of Flowers' most profitable ventures. The company's Flowers Bakeries unit is also profitable, but Mrs. Smith's has been losing money. Overall, Flowers reported earnings of $22.3 million, or 22 cents per share, on sales of $2.3 billion in the six months ended July 15.

STEIN MART EXPECTATIONS

Stein Mart Inc. Chairman and Chief Executive Officer Jay Stein said last week that fourth-quarter earnings should "slightly" exceed analysts forecasts. …

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