Sara Lee Rejects Buyout Offer

By Robert Davis
Jan 26 2011

Sara Lee, the largest US-based frozen dessert maker, announced this morning that they have rejected a buyout offer from a private equity firm because the figure was too low.

The private equity firm placed a bid with Sara Lee officers which worked out to $18 per share for the company, including taking over millions in debt. However, the last closing price for Sara Lee was $19.64 per share meaning that the company would lose money if they agreed to the sale.

For the past two years Sara Lee has been on the market as the company has been battling the healthy push in the US. Sara Lee products are considered some of the best frozen desserts in the US but they are also high in sugar which means that they are on the losing end of the spectrum for the healthy living lifestyle that has become all the rage.

But all is not lost as another firm has already dropped a bid for the company. JBS, the largest meat company in the world, placed a bid of $21 per share for Sara Lee, which will also include taking on the massive debt that the company has piled up. This would give a profit for the Sara Lee shareholders who are looking for the quick sale.

Sara Lee has been a drag on the parent company that holds the majority of its shares for years and they are looking to trim the fat for the coming year.