Blackstone, KKR Barred From Bidding On Sara Lee Carve-Out

(Reuters) – Private equity firms are being dissuaded from bidding for Sara Lee Corp’s household and personal-care business because the seller wants to attract a bidder from its own sector rather than a financial buyer, a source familiar with the situation said on Tuesday.

The New York Post, citing two people close to the process, reported on Tuesday that investment bank Goldman Sachs , which is fielding offers for the unit, is blocking Blackstone Group and Kohlberg Kravis Roberts from participating.

The source who spoke to Reuters said that Sara Lee and Goldman are keen to attract a “strategic” bidder — one in Sara Lee’s sector rather than a buyout firm. The source said the company also is only interested in taking bids for the unit as a whole.

However, that source said it was unclear how strong private equity interest had been in buying the unit.
The New York Post said KKR and Blackstone had expressed an interest in buying the division, whose products include 100 brands such as Kiwi shoe polish, Brylcreem hair products and Ambi Pur air freshener, the paper said.

But it cited sources saying the company, through its bankers, has told potential suitors that they must bid for the entire operation and they cannot partner with private equity firms to complete a transaction.
The division, which the company hopes will fetch more than $3 billion, has attracted interest from Colgate-Palmolive , Clorox and SC Johnson, the Post said.

Goldman Sachs, Blackstone, KKR and Sara Lee were not immediately available for comment.
Shares of Sara Lee fell 1 percent to $8.77 in early trading on the New York Stock Exchange.

By Megan Davies