BUZZ-View from the buyside: Premier AM sifts through consumer staples

** Imperial Tobacco (LSE: IMT.L - news) (IMT) & Dairy Crest are strong picks for Premier AM's head of UK equities Chris White in a consumer staples universe where rich valuations increasingly difficult to justify

** Both companies have respective deals in the works

** White "can live with" blue-chip staple like IMT which has good divi yield, reasonable valuation & potential big upgrade (earnings & cash flow) if deal to buy certain US brands sold by Reynolds/Lorillard (NYSE: LO - news) goes ahead

** IMT expects to close acquisition H2, pending US antitrust approval of Reynolds/Lorillard merger; if IMT succeeds with acquisition, divi growth likely 10 pct in next years, White says (he holds IMT)

** Other big consumer cos pricey (IMT on c.16x next year's expected earnings vs Diageo (LSE: DGE.L - news) , Unilever & AB Foods on c.20x or more); income funds in particular looking beyond divi stalwarts, sometimes down mkt-cap scale

** White holds Dairy Crest (LSE: DCG.L - news) , which is trying to sell dairy operations to competitor (referred to UK CMA for review); he says successful demerger would leave branded food business on PE of 11.5x, "ridiculous" for a consumer staples co (RM (LSE: RM.L - news) : tricia.wright1.thomsonreuters.com@reuters.net)