Sara Lee's board is reviewing approaches from multiple private equity firms exploring a leveraged buyout of the food and beverage company, according to a Wednesday report in the Financial Times. A company spokeswoman declined to address the speculation directly, saying Sara Lee sees greater value in remaining a focused, independent operation.
Sara Lee shares rose about 2 percent to $16.39 in afternoon trading Wednesday, even though the stock has generally trended lower over the past year. Some Wall Street analysts said they were hearing talk of a potential offer as high as $24 per share. Bear Stearns analysts noted in an investor memo that private equity interest at that price level was circulating as a rumor.
The company has been working through a five-year transformation plan launched in early 2005, shedding certain business units and spinning off its Hanesbrands division last month. Chief executive Brenda Barnes has led efforts to streamline operations. Sara Lee's portfolio includes Douwe Egberts coffee, Jimmy Dean and Ball Park sausages, Sanex body care products, and cheesecakes, among other brands.
Large leveraged buyouts have been increasingly common recently. Casino operator Harrah's Entertainment received a roughly $15 billion takeover offer from two private equity groups, following HCA's $33 billion sale to an investor group, which set a record for leveraged buyouts.
Historical summary. TurkishPress restated this wire report, first published in October 2006, in its own words.