January 11, 2011
Apollo amongst others contemplating Sara Lee buyout
Apollo Global Management, which has made an approach to food and beverage company Sara Lee Corp, is among a group of private equity firms interested in a buyout.
It was reported that the consortium also includes Bain Capital and TPG Capital.
A leveraged buyout of Sara Lee, which has a market value of US$11 billion, would likely be the largest since the credit crisis.
The future of Sara Lee, whose brands include Jimmy Dean sausages and Senseo coffee, has been in question for some months. The company's shares closed on Friday 3 cents lower at US$17.43.
It was reported that the consortium has met in recent weeks with Sara Lee's financial advisors to talk about a deal. Investor C. Dean Metropoulos, who is an operating partner of Apollo, is also involved.
Sara Lee and the private equity firms were not immediately available for comment.
It was also reported on Sunday (Jan 9) that Brazilian meat producer JBS is considering making another takeover offer for Sara Lee and its executives are travelling to the US this week.
Sara Lee had been in talks to sell itself to JBS but the pair was at odds over price, a source said.
In November, Sara Lee sold its North American bakery business to Mexico's Grupo Bimbo for US$925 million and analysts pointed out that the company's new focus, North American meats and European coffee, have little overlap.
The company has also been considering options such as separating its meats and drinks businesses.
The company's board aims to decide by the end of January whether to break apart the company, but any decision would be dictated by the potential tax costs.
