Sara Lee willing to split apart international unit: sources

Sara Lee Chairman and Chief Executive Brenda Barnes in a photo courtesy of the company.

PHILADELPHIA (Reuters) - Sara Lee Corp (SLE.N) may break apart assets of its international household and personal care division in order to find suitors for its disparate products, which range from air freshener to shoe polish, sources familiar with the situation said on Thursday.

Sara Lee initially asked suitors to submit offers for the whole unit, which could fetch about $2 billion, rather than bidding on individual assets, sources familiar with the situation previously told Reuters.

The company also had dissuaded private equity firms from bidding, reducing suitors to so-called strategic bidders or companies in its industry, a separate source previously said.

Sara Lee now has changed strategies to encourage more interest in the auction, which features Brylcreem hair products, Ambi Pur air freshener and Kiwi shoe polish, sources familiar with the situation told Reuters on Thursday.

The company is willing to entertain offers for pieces of the business, said the sources, who declined to be named because they were not authorized to speak to the media.

In the end, Goldman Sachs, which is running the four-month-old auction, may try to put together a syndicate of buyers for various parts of the business, said one European investment banker, who declined to be named.

Any remaining assets could be offered to private equity firms, the European banker said.

Sara Lee may even be forced to keep certain brands or markets if it fails to attract lucrative enough bids, said a U.S. investment banker, who declined to be named because he was not authorized to speak with the media.

"Where there's no smoke, there tends to be no fire. This is not an auction people are buzzing about," said one consumer investment banker who declined to be named because he was not authorized to speak to the media.

"It's a set of mature assets with little-to-no common thread as far as distribution or manufacturing. Some of them are even the No. 4 or 5 player in their market. It's hard to sell a No. 1 brand right now, let alone a No. 4 or No. 5 brand," said the consumer investment banker said.

Sara Lee declined to comment.

The company, which aims to focus on its Jimmy Dean and Hillshire Farm processed meats, Senseo coffee, and Sara Lee bread, picked a tough time to sell the international assets.

Last month, Sara Lee Chairman and Chief Executive Brenda Barnes admitted that Western Europe remains the company's "sensitive area right now" in terms of sales.

The company suffered "a pocket of softness in Spain and the UK, primarily our air freshener business," she said, adding that the bread business in Spain is "undergoing some challenges in terms of consumer demand being a little bit soft."

Although the bulk of the unit's sales are in Europe, it also does significant business in markets like Malaysia, India, Indonesia and the Philippines. Other markets include Africa, Eastern Europe and Australia.

Barnes previously told Reuters she feels "very good about the interest (in the international unit), and in the end we'll sell it if we get the right value for it."

Clorox Co (CLX.N) last month ruled itself out of the running for the Sara Lee unit. Meanwhile, Reckitt Benckiser (RB.L), Unilever (ULVR.L), Colgate-Palmolive Co (CL.N), S.C. Johnson & Son Inc and even Procter and Gamble Co (PG.N) have been cited by analysts as potential bidders for some of the assets.

Colgate, Reckitt, S.C. Johnson, and Unilever could not be immediately reached for comment. P&G declined to comment.

(Additional reporting by Brad Dorfman in Chicago and Victoria Howley in London; Editing by Carol Bishopric)

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