Bimbo leads with $1 billion bid for Sara Lee

Grupo Bimbo is the lead bidder to buy Sara Lee Corp’s North American bread business for about $1 billion, though a deal could be several weeks away, Bloomberg news reportedon Tuesday.

Sara Lee, which declined to comment, said last month it planned to spend more on its North American bakery business and raise some prices as it looks to improve performance in that lagging business.

That announcement to invest in the business had come after some suitors walked away from the bakery auction, sources familiar with the situation previously told Reuters.

Bloomberg reported that some private-equity funds are still looking at the bread business, though Bimbo, which declined to comment, has emerged as the likeliest buyer.

Mexico’s Bimbo bought the U.S. bread-making unit of Canada’s George Weston Ltd for $2.38 billion in December 2008, increasing its presence in the eastern United States.

Bimbo reported last week a 14 per cent drop in third-quarter net profit due to higher taxes while revenues barely grew, with U.S. operations dented by a stronger peso.

Sara Lee initially hoped to get $1.5 billion for the bread business, but the unit may ultimately only fetch $1 billion, Bloomberg reported.