Sara Lee Corp. said yesterday it was talking with Columbia-based JP Foodservice Inc. about combining JP Foodservice with Sara Lee's food-service business, PYA/Monarch.
Sara Lee said it has proposed exchanging PYA/Monarch for 52.4 million shares of newly issued JP Foodservice common stock worth about $946 million after taking into consideration PYA/Monarch's debts of $125 million. Sara Lee would become the majority shareholder of JP Foodservice, which would continue to be publicly held.
Sara Lee said it expects JP Foodservice's board to appoint a committee of independent directors to evaluate the proposal.
In addition, the proposed transaction would be subject to the approval of the stockholders of JP Foodservice and Sara Lee's board of directors.
JP Foodservice is the nation's seventh-largest distributor of food and related products to restaurants and other food-service establishments in the Mid-Atlantic, Midwest and northeastern United States.
PYA/Monarch, a wholly owned subsidiary of Sara Lee, is the leading food-service distributor in the southeastern U.S.