Battle for Sara Lee heats up, sending shares higher

Shares soared as high as $19.07 on Monday, before closing at $18.35, on speculation that competing bids are expected from Brazilian beef company JBS SA, whose previous buyout offer Sara Lee reportedly rejected, and a group led by private-equity firm Apollo Global Management LLC and investor C. Dean Metropoulos.

The company, valued by analysts at about $12.5bn, has not commented on the rumors at any time.

Citing unnamed sources, the Wall Street Journal​ said on Monday that Sara Lee’s board is planning to meet by the end of the week to weigh up its options. Its sources added that some buyers may find it difficult to meet the board’s expectations considering that the company’s share price has risen 14 percent since rumors of a potential buyout first emerged in mid-December.

Reportedly, Sara Lee has also been mulling the separation of its coffee and meat businesses, and this could become more likely if the company considers new buyout offers to be too low.

The company has been selling off business divisions, including its North American bakery business, which it said it would sell to Mexico-based Grupo Bimbo in November, in order to focus primarily on its core food and beverage businesses.

Last month, the company also agreed to sell its global shoe care business, which includes Kiwi polish, to SC Johnson for $328m.

Sara Lee has been selling off parts of its business since August last year, when CEO Brenda Barnes stepped down after suffering a stroke. The company has been without a permanent CEO since then, fuelling uncertainty about its future. It has been led in the meantime by interim chief executive Marcel Smits.