JBS Said to Plan Sara Lee Offer of Around $21 a Share
Sara Lee (SLE) Shares Jump as JBS Said to Offer $21/Share
JB Reed/Bloomberg
Boxes of Sara Lee Corp. frozen pies are displayed for sale at a grocery store in New York.
Boxes of Sara Lee Corp. frozen pies are displayed for sale at a grocery store in New York. Photographer: JB Reed/Bloomberg
JBS SA, the world’s biggest beef producer, told Sara Lee Corp. that it plans to make a takeover offer of around $21 a share, according to two people with knowledge of the matter.
Blackstone Group LP is working with Sao Paulo-based JBS on a bid and would be interested in taking over Sara Lee’s coffee business, said three people, who declined to be identified because the matter is private. An offer of $21 a share would value Sara Lee at about $13.4 billion and is 14 percent higher than the company’s closing price of $18.36 yesterday.
JBS informed Sara Lee of its intentions late yesterday and said that it plans to submit a formal offer later today, one person said. An exact price couldn’t be determined, and JBS could still change its plans.
An offer would pit JBS against Apollo Global Management LLC, Bain Capital LLC and TPG Capital. The private-equity firms’ bid was close to the $20 a share that Sara Lee’s board is seeking, a person with knowledge of the matter said Jan. 23. The board plans to meet this week to review the bids and to consider spinning off the company’s coffee business as an alternative to a sale, the person said.
Spokesmen for JBS and Sara Lee declined to comment.
Sara Lee rose $1.28, or 7 percent, to $19.64 at 4:01 p.m. in New York Stock Exchange composite trading. The jump was the biggest since October. JBS advanced 1.3 percent to 6.99 reais in Sao Paulo yesterday.
JBS Strategy
Acquiring Downers Grove, Illinois-based Sara Lee would help JBS expand further beyond its Latin American home turf, building upon prior acquisitions in the U.S. and Europe. Sara Lee’s North American retail meat business, whose sales topped $2.8 billion in the year ended in June, would account for more than 15 percent of JBS’s total revenue.
In December, Sara Lee rejected an offer from JBS as too low, people familiar with the matter said at the time. The bid of about $17.50 a share valued Sara Lee at about $11 billion, the people said.
JBS, led by CEO Joesley Mendonca Batista, acquired meat processor Swift & Co. in 2007 and two Smithfield Foods Inc. units in 2008. It also bought poultry producer Pilgrim’s Pride Corp. in 2009. Batista has said the company will keep expanding and seek more acquisitions in the U.S. and Brazil, the world’s biggest beef producers, as well as other countries.
After a dearth of large transactions in 2010, multibillion- dollar deals are staging a comeback. Duke Energy Corp. plans to buy Progress Energy Inc. for $13.7 billion, and DuPont Co. agreed to acquire Danisco A/S for $5.8 billion on Jan. 10.
Sara Lee, whose total sales topped $10 billion last year, has gotten rid of some units to focus on coffee and meat. The company has also attracted interest from KKR & Co., people with knowledge of the matter said in October.
To contact the reporters on this story: Jeffrey McCracken in New York at jmccracken3@bloomberg.net; Zachary R. Mider in New York at zmider1@bloomberg.net; Cristina Alesci in New York at calesci2@bloomberg.net.
To contact the editors responsible for this story: Robin Ajello at rajello@bloomberg.net; Jennifer Sondag at jsondag@bloomberg.net.
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