My compadres at Thomson Reuters are reporting that KKR is potentially interested in Sara Lee and could possibly partner with an interested party. JBS, the Brazilian meat processor, is considering Sara Lee while another PE consortium, which includes Apollo, Bain and TPG, is also lurking, Reuters says. C. Dean Metropoulos is also part of the group, various reports say.
However, the New York Post is reporting that Sara Lee’s board has shut out KKR from potential sale talks. It seems that KKR made a “low ball” offer for Sara Lee that has incensed the company’s board and the PE firm has been frozen out of talks since August. The report didn’t mention –not that I see—what the offer was.
Sara Lee also rebuffed a $17.50 a share, or $11 billion offer from JBS in December, Bloomberg News reported this week. JBS could make a revised offer for the food company. But Sara Lee is likely holding out for $20 a share, or almost $13 billion, Bloomberg says.
So why all the interest in Sara Lee? It’s the brands. Sara Lee’s products—which include Jimmy Dean sausages and Ball Park franks—are well-known by consumers. Also, Sara Lee fits the PE strategy of cutting money-losing divisions/people to increase profits. Sara Lee is always selling something. The company currently has an $11.69 billion market cap. Debt is about $3 billion.
Late last year, Grupo Bimbo agreed to buy the North American Fresh Bakery unit of Sara Lee for $959 million. Sara Lee, in December, also closed the sale of its Body Care and European Detergents businesses to Unilever for 1.21 billion Euros.
Shares of Sara Lee were up 10 cents to $18.29 late Thursday.