(Adds company background, TreeHouse share price)
By Olivia Oran and Greg Roumeliotis
March 19 TreeHouse Foods Inc is weighing
a bid for Michael Foods Group Inc, joining a list of suitors
that includes much larger rival Tyson Foods Inc, people
familiar with the matter said on Wednesday.
Michael Foods, the egg and dairy products producer owned by
Goldman Sachs Group Inc's private equity unit, is in the
advanced stage of finding a buyer. People familiar with the
process have previously identified Tyson as the most likely
buyer. It is not clear how serious TreeHouse might be about
possibly acquiring Michael Foods.
A deal, which could be between $2 billion and $2.5 billion,
would be a big bite for TreeHouse, which has a market value of
around $2.7 billion. The company specializes in private-label
foods and has said publicly this year it is looking at expanding
its non-branded food business.
Other parties in talks with Michael Foods include private
equity firms Golden Gate Capital and Oaktree Capital Management,
the people said. Oaktree is working with its portfolio company
AdvancePierre Foods, a protein supplier to schools and
restaurants, added the sources.
Shares of TreeHouse were up 3.8 percent at $76.30 on
Wednesday morning on news of the possible Michael Foods bid.
TreeHouse, Michael Foods and Golden Gate declined to
comment. Goldman Sachs and Oaktree could not immediately be
reached for comment.
Second-round bids for Michael Foods are due in early April,
said the people, who asked not to be identified because the
matter is confidential.
Michael Foods is working with Goldman Sachs' investment
banking unit and Bank of America Merrill Lynch on a
potential sale, people familiar with the matter told Reuters in
Tyson, one of the world's largest chicken processors, is
evaluating an offer for Michael Foods, betting on synergies on
the poultry side of the business as both companies raise
chickens, Reuters first reported on Jan. 16.
Minnetonka, Minnesota-based Michael Foods produces and
distributes products including specialty eggs, refrigerated
potatoes, cheese and other dairy products.
Goldman Sachs Capital Partners bought Michael Foods from
private equity firm Thomas H. Lee Partners LP in 2010 for around
$1.7 billion. Thomas H. Lee retained an ownership stake of about
20 percent as part of the transaction.
(Reporting by Olivia Oran and Greg Roumeliotis in New York;
additional reporting by Soyoung Kim in New York; editing by Phil
Berlowitz and Matthew Lewis)