Sara Lee board to determine fate this month

Sara Lee Corp.'s board plans to make a decision about whether to sell or break up the company by the end of the month and hasn't received a new takeover offer from Brazil's JBS SA, according to a person familiar with the matter.

Sara Lee's board is determining whether to spin off its coffee or meat business, a decision that will be based on tax costs, said the person, who declined to be identified because the matter is private. JBS's last offer came in mid-December at about $17.50 a share, this person said.

Talks have faltered in recent weeks, frustrating the board at Downers Grove-based Sara Lee, according to the person. The board wants to speed up a decision because of the impact it's having on the search for a new chief executive officer to replace Brenda Barnes, who resigned last year for health reasons.

"You do need a CEO," Tim Ramey, an analyst at D.A. Davidson in Lake Oswego, Oregon, said today. Marcel Smits, the interim chief, would be the best choice to preside during a breakup because of his background in tax law, said Ramey, who rates the shares neutral.

If Smits, 49, is chosen to run the company, a breakup or privatization is more likely, Sanford C. Bernstein & Co. analyst Alexia Howard said in a note to clients last month. The other internal candidate for the job is 47-year-old C.J. Fraleigh, who runs North American retail and foodservice operations.

Sara Lee shed businesses last year to focus on faster- growing divisions, such as meat and coffee. The international beverage unit is the company's largest, with sales totaling $3.2 billion in the year ended in June. The retail meat business's sales topped $2.8 billion over the same period.

Sara Lee spokesman Mike Cummins declined to comment, as did a spokesman for JBS.

JBS hasn't ruled out its interest in buying Sara Lee and may still come back with a higher bid, the Wall Street Journal reported earlier today. The purchase would help JBS, the world's largest meat processor, expand further beyond Latin America.

Sara Lee was unchanged at $17.46 in New York Stock Exchange composite trading. The shares climbed 44 percent last year. JBS declined 5 centavos to 7.08 reais.

Last month, Sara Lee said it received a binding offer from S.C. Johnson & Son Inc. to buy its global shoe care business, including the Kiwi brand.