NEW YORK (Reuters) - Michael Foods Group Inc is in advanced talks to sell itself for close to $2.5 billion, with Tyson Foods Inc TSN.N and Post Holdings Inc POST.N emerging as final contenders to clinch a deal, people familiar with the matter said on Friday.
A transaction is expected to come in the next two weeks for the egg and dairy products producer, which has been put up for sale by Goldman Sachs Group Inc’s GS.N private equity arm, the people said.
Michael Foods is evaluating binding bids from Tyson and Post that were submitted earlier this week and has yet to determine which party to sell to, said the people, who asked not to be named because the matter is not public.
Representatives for Michael Foods, Goldman Sachs, Tyson and Post did not immediately respond to requests for comment.
For both Tyson and Post, a takeover of Michael Foods would be the largest deal they would have sealed in recent years.
Tyson, with a market valuation of around $14 billion, has traditionally shunned large acquisitions. The last major acquisition it made was its 2001 purchase of IBP Inc for $3.2 billion, which helped transform the company into the world’s largest meat producer and processor.
By contrast, Post Holdings, led by veteran consumer executive Bill Stiritz, has been pursuing deals aggressively.
In the last 12 months alone, the cereal company 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.
Michael Foods is working with Goldman Sachs’ investment banking unit and Bank of America Merrill Lynch BAC.N on a potential sale, Reuters first reported in December.
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.
The company also drew interest from other parties earlier in the sale process; including TreeHouse Foods Inc THS.N, and buyout firms Clayton Dubilier & Rice LLC, Golden Gate Capital and Oaktree Capital Management, people familiar with the matter previously said.
Reporting by Soyoung Kim and Olivia Oran in New York; Editing by David Gregorio and Jonathan Oatis