JBS stock falls on concern over Sara Lee bid

SAO PAULO (Reuters) - Shares of JBS, the world's biggest meat company, fell more than 2 percent on Wednesday on concerns that it would need to offer more debt or stock to buy Sara Lee Corp. (SLE.N)

Reuters reported on Tuesday that JBS had made a verbal buyout offer to the U.S. food company's board, which could decide on it this week. Bloomberg News reported that JBS had indicated the bid would be around $21 a share.

Such a bid would value Sara Lee at about $13.4 billion, based on the shares outstanding for the company at the end of its most recently reported quarter. JBS is valued at $10.5 billion, prompting analysts to say that a flurry of bond and share sales is on the works to fund the Sara Lee deal.

A price about $21 per share of Sara Lee "represents a lot of money," said stock trader Rafael Dornaus of brokerage Hencorp Commcor in Sao Paulo. "Even as JBS has partners in this bid, the question is whether more debt and share sales are on the way to fund this deal."

JBS and Sara Lee declined to comment.

The JBS-led consortium, which includes buyout giant Blackstone Group (BX.N), has already lined up financing and could tap other sources to raise the funds to buy Sara Lee, Reuters reported last week, citing a source with direct knowledge of the situation.

Voting shares of JBS (JBSS3.SA) fell as much as 2.7 percent to 6.80 reais, their lowest level since January 20. Wednesday's decline was the steepest since at least December 28.

JBS might only be able to bid $19 to $20 a share as it struggles to raise more financing, The Wall Street Journal reported on Wednesday.

An analyst who requested anonymity said on Wednesday that a Sara Lee acquisition could derail JBS's efforts to integrate recent purchases. The company acquired about a dozen rivals since 2007.

Shares of Sara Lee, meanwhile, were down 5.9 percent at $18.49 on the New York Stock Exchange after the Wall Street Journal report. Earlier, the stock fell after New York Post reported that the company had rejected a separate bid from private equity firms Apollo Management APOLO.UL, Bain Capital and TPG Capital TPG.UL.

Sara Lee, which makes Hillshire Farm meats, Senseo coffee and a host of other packaged foods, has been in sale talks for a couple of months.

The Downers Grove, Illinois-based company has indicated it would seriously consider a bid of roughly $20 per share in order to continue talks with a suitor, a separate source familiar with the situation said. The source was not authorized to speak to the media.

The future of Sara Lee, with brands that also include Jimmy Dean sausages, has been in question for months. Besides a sale, the company has been examining various options, such as splitting itself up into meat and beverage units.

(Editing by Gerald E. McCormick, Dave Zimmerman, Lisa Von Ahn)