NEW YORK (AP) -- Sara Lee Corp.'s stock sank in trading Thursday on reports that it is likely to split its business after offers from potential buyers fell short of its expectations.
The Wall Street Journal, citing sources it did not name, reported that Sara Lee is expected to separate its coffee and meat businesses. It would be easier for suitors to finance a deal for parts of Sara Lee instead of the whole company, which could cost nearly $13 billion at the price it reportedly has sought.
The food maker said Thursday that it would hold a webcast Friday morning to update investors on its strategy, as well as offer its financial outlook for 2011.
Sara Lee, based in Downers Grove, Illinois, has been a potential acquisition target for some time, but the company has declined to discuss the ongoing talks. A spokesperson for Sara Lee said the company had no comment.
Brazilian beef processor JBS SA reportedly bid for the company but struggled to secure financing to raise the bid from roughly $17.50 per share to $20-per-share range the company desires, the newspaper reported. JBS continues to be interested in making a bid for parts of Sara Lee.
It faces competition from a group of investors led by private-equity company Apollo Global Management LLC. The group has so far declined to raise its offer of close to $19 per share for the food maker.
Sara Lee is still open to other offers and didn't rule out the possibility that a higher offer later or another suitor emerging, people familiar with the matter told the newspaper. But that scenario is looking less likely, and Sara Lee wants to decide its future soon.
The company has been in flux since its CEO, Brenda Barnes, stepped down last summer to recover from a stroke. The company has searched for a permanent successor but that process has been delayed while it considers its strategic options.
Sara Lee has been selling off its business lines for several years to focus on the core food and beverage business. It has also cut its debt, making it more attractive for a potential takeover.
Shares of Sara Lee fell 88 cents, or 4.8 percent, to end regular trading Thursday at $17.64. They fell another 20 cents after hours.
The Wall Street Journal, citing sources it did not name, reported that Sara Lee is expected to separate its coffee and meat businesses. It would be easier for suitors to finance a deal for parts of Sara Lee instead of the whole company, which could cost nearly $13 billion at the price it reportedly has sought.
The food maker said Thursday that it would hold a webcast Friday morning to update investors on its strategy, as well as offer its financial outlook for 2011.
Sara Lee, based in Downers Grove, Illinois, has been a potential acquisition target for some time, but the company has declined to discuss the ongoing talks. A spokesperson for Sara Lee said the company had no comment.
Brazilian beef processor JBS SA reportedly bid for the company but struggled to secure financing to raise the bid from roughly $17.50 per share to $20-per-share range the company desires, the newspaper reported. JBS continues to be interested in making a bid for parts of Sara Lee.
It faces competition from a group of investors led by private-equity company Apollo Global Management LLC. The group has so far declined to raise its offer of close to $19 per share for the food maker.
Sara Lee is still open to other offers and didn't rule out the possibility that a higher offer later or another suitor emerging, people familiar with the matter told the newspaper. But that scenario is looking less likely, and Sara Lee wants to decide its future soon.
The company has been in flux since its CEO, Brenda Barnes, stepped down last summer to recover from a stroke. The company has searched for a permanent successor but that process has been delayed while it considers its strategic options.
Sara Lee has been selling off its business lines for several years to focus on the core food and beverage business. It has also cut its debt, making it more attractive for a potential takeover.
Shares of Sara Lee fell 88 cents, or 4.8 percent, to end regular trading Thursday at $17.64. They fell another 20 cents after hours.
