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Campbell Soup puts Godiva on the block

August 10, 2007|From the Associated Press

Campbell Soup Co. is putting Godiva up for sale, saying the decadent Belgian chocolate does not fit with the company's focus on healthy, down-home foods.

The Camden, N.J.-based company announced Thursday that it had hired Centerview Partners to advise it on what to do with Godiva Chocolatier Inc., which Campbell Soup has owned for more than 40 years.

Analyst Mitch Pinheiro, who follows Campbell for Janney Montgomery Scott, said the company would need to get about $900 million for Godiva to avoid diluting earnings.

Pinheiro said Campbell had resisted selling Godiva in the past partly because there was no place to reinvest the money that would equal profit generated by the chocolate company.

He said that had changed. Campbell could put money toward its planned entry into the soup business in mainland China and Russia and into expanding manufacturing capacity for its increasingly popular V8 juices -- and do it without taking on additional debt.

"I think the fact that the company's putting Godiva up for sale signals that Campbell Soup has strong growth opportunities in its core portfolio," Pinheiro said.

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