By Mike Hughlett | Sara
Lee Corp. said Tuesday it will plow proceeds from the sale of its
household and body care divisions into a bigtime stock buyback — $2.5
billion to $3 billion over a three year period.
 
Wall Street reacted buoyantly: Sara Lee’s stock was up over 3 percent
in late afternoon trading on a day the broad market, as measured by the
S & P 500, was up 1.7 percent.

“We happen to believe our stock is a very good value,” Sara Lee chief executive Brenda Barnes told reporters at the Consumer Analyst Group of New York Conference  (CAGNY) in Boca Raton. The stock, which has perked up recently, has generally lagged most food companies in recent years.
 
Downers Grove-based Sara Lee, maker of bread and myriad meat products, unveiled the sale of its body care division to Unilever last fall for $1.88 billion, and in December announced the sale of its household products division to Procter & Gamble for $470 million. It’s still shopping its shoe care and insecticide businesseses.
 
Sara Lee intends to begin using those proceeds this year, initially snapping up to $1.3 billion of its shares. “We won’t sit on cash,” Barnes told analysts at CAGNY.
 
Barnes said despite the buyback, Sara Lee will still consider acquisitions. “But we don’t want to add something on that doesn’t make sense.”