(Adds background on the deal and Michael Foods)
April 16 Cereal maker Post Holdings Inc
is close to a deal to acquire eggs and dairy producer and
distributor Michael Foods Group Inc for $2.5 billion, prevailing
over a rival bid from Tyson Foods Inc, said a person
familiar with the matter.
The deal is set to make Post Holdings a major player in the
protein market, as healthy food options gain in popularity among
consumers. Reuters first reported last week that Post Holdings
and Tyson Foods were the final bidders for Michael Foods.
News of Post Holdings winning the auction for Michael Foods,
which was first reported by the Wall Street Journal earlier on
Wednesday, drove the company's shares up 6 percent, giving it a
market value of around $2.1 billion.
Goldman Sachs Group Inc's private equity arm bought
Michael Foods from buyout 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 that transaction.
The source asked not to be identified because the deal has
not yet been officially announced. Representatives for Goldman
Sachs, Post, Michael Foods and Tyson Foods did not respond to
requests for comment.
Minnetonka, Minnesota-based Michael Foods produces and
distributes products including specialty eggs, refrigerated
potatoes, cheese and other dairy products. St. Louis-based Post
makes cereal products that include Raisin Bran.
Post has been pursuing deals aggressively in the last 12
months. The company has acquired peanut butter maker Golden Boy
Foods Ltd, pasta company Dakota Growers Pasta Co, sports
nutrition brand PowerBar, protein bar maker Dymatize Enterprises
LLC, and protein company Premier Nutrition Corp.
In 2013, Michael Foods posted operating profit of $163.9
million, up 22 percent from the same period the year before.
(Reporting by Olivia Oran in New York; Editing by Andrew Hay
and Cynthia Osterman)