Two potential buyers have expressed interest in acquiring Sara Lee, people briefed on the matter said on Sunday.
The board of Sara Lee, the maker of Jimmy Dean sausages and other products, received a preliminary bid late last week from a group of buyout firms, which is led by Apollo Global Management and which includes Bain Capital and TPG Capital, these people said. The company is likely to receive another offer soon from JBS of Brazil and the Blackstone Group.
The board is expected to meet this week to compare the offers with a plan to split the company into its coffee and meats businesses, these people said on the condition of anonymity because the discussions were private.
The food conglomerate is weighing options for its future after rejecting takeover bids last year from JBS and buyout firms like Kohlberg Kravis Roberts.
Sara Lee has been leaning toward a breakup, unless a takeover offer proves high enough to compensate for the tax-free advantages of a split into two companies, these people said.
The company may try to decide before its second-quarter earnings announcement on Feb. 8 or a conference for consumer products analysts next month, one of these people said.
A spokesman for Sara Lee was not immediately available for comment.
Shares in Sara Lee closed on Friday at US$18.70, up almost 2.4 percent. That gives the company a market value of about US$12 billion.
News of the Apollo bid was first reported by Reuters on Saturday; news of Blackstone’s involvement was first reported by Bloomberg News on Sunday.
Private equity firms have been seeking ever-bigger companies to take over, as many have war chests bulging with billions of US dollars in capital, as well as access to cheap financing. A leveraged buyout of Sara Lee would be the largest acquisition by private equity in years and would test the industry’s ability to close on such a large transaction.
JBS, a meat processor, is one of several Brazilian companies seeking to expand their global presence. It has been working to secure financing for a Sara Lee bid, though some of the people briefed on the matter said that merging JBS and Sara Lee would leave the combined company with a high amount of debt — a concern to Sara Lee’s board.
One driver of Sara Lee’s efforts to sell or split itself is the absence of a permanent chief executive since Brenda Barnes left in August last year after suffering a stroke. Marcel Smits, the company’s chief financial officer, has been interim chief since.