Sara Lee Corp. shares jumped nearly 8 percent Monday after The New York Post reported that the foodmaker received an unsolicited offer from private equity firm KKR Co. and could arouse the interest of Anglo-Dutch conglomerate Unilever.
KKR approached the maker of Sara Lee bread and Jimmy Dean sausages about six weeks ago in what could have been a $12 billion deal, the newspaper reported, citing a person familiar with the matter. Sara Lee's board rebuffed the offer, the report said.
Sara Lee shares rose $1.05 to $14.48. Based on their closing price on Friday, Sara Lee had a market value of about $8.59 billion.
Sara Lee and KKR declined to comment. Unilever did not immediately respond to requests for a comment about the report.
Morningstar equity analysts said Sara Lee would make an attractive buyout target, given its free cash flow and low debt. The company's management team is also in transition after CEO Brenda Barnes suffered a stroke in May and officially stepped down in August.
"KKR may consider this a window of opportunity," Morningstar said. "We would expect a private equity acquirer to sell off underperforming brands, such as the bakery business, separately."
Marcel Smits, who had been Sara Lee's chief financial officer, is filling in for Barnes while the company seeks a permanent CEO.
Smits used to be the CFO of Vendex KBB, now known as Maxeda, a Dutch retail group. KKR led a buyout of Vendex in 2004, the same year Smits moved to Dutch telecommunications company Koninklijke KPN NV.
The Post article, citing sources, also said Unilever would be interested in Sara Lee if it were not required to take the bakery division, which has struggled with fierce price competition.
Sara Lee was quietly seeking buyers for its bread unit, sources told Reuters in July. But at a September analyst meeting, company executives said they planned to spend more money on the business with a focus on raising prices for the products it sells.
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