Sara Lee (NYSE:SLE), JBS Deal Can Get Done Says Wells (NYSE:WFC)

With the market capitalization of Sara Lee (NYSE:SLE) and JBS almost the same, under normal market conditions an acquisition would be difficult to move forward.

But with the potential support from the Brazilian government, which could help finance the deal, it is still a definite possibility the deal can get done.

Wells Fargo (NYSE:WFC) noted, "While JBS has roughly the same market capitalization as SLE, JBS could potentially receive support in financing a transaction from the Brazilian government, a top shareholder of JBS. While the Journal and other media outlets have reported that SLE rebuffed a potential offer from KKR earlier this year, we believe that private equity is less likely to be a buyer than JBS owing to the substantial equity investment and debt financing needed for an LBO."

Wells Fargo maintains a "Market Perform" rating on Sara Lee, which closed Monday at 17.69, up $0.43, or 2.49 percent.

Sara Lee's (NYSE:SLE) Interest Growing in JBS (OTC:JBSAY.PK) Sale

Brazil's JBS SA (OTC:JBSAY.PK) has indicated interest in acquiring Sara Lee Corp.(NYSE:SLE) for several months, but recently Sara Lee has reportedly taken a much more serious look at the offer.

People close to the situation said there has been no final decision made yet, and there are also other options on the table.

One immediate problem in general as far as the takeover itself is whether or not JBS would be able to put together a full offer for Sara Lee, as they're close in size to the company as measured by market capitalization. At close Friday Sara Lee has a market cap of just over $11 billion. JBS was at $10.53 billion a close, and the difference was only because of the story being told here which pushed up the price of Sara Lee on Friday.

Besides allowing itself to be acquired, other options being considered would be to put their beverage and core meats businesses up for sale.

With Jimmy Dean and Hillshire Farm being part of the picture, there is certainty competitors would be attracted to the proposition if they went that route.

Sara Lee is in limbo until they make these decisions, as far as replacing retired CEO Brenda Barnes, who stepped down after suffering a stroke.

JBS closed Friday at $8.35, up $0.14, or 1.71 percent. Sara Lee closed at $17.26, gaining $0.87, or 5.31 percent.