Kraft Foods has refused to be drawn on reports that initial bids for its Post cereals business are due this week.

The US food giant has been reported to be mulling the sale of the unit, which produces brands including Grape Nuts and Shredded Wheat.

A report in the Financial Times over the weekend claimed that first-round bids for the business would be submitted this week. The report cited PepsiCo, which owns the Quaker Oats cereals business, as a front-runner in the race for Post.

However, Kraft stayed tight-lipped on the potential sale of its cereals business, which is the third-largest in the US behind Kellogg and General Mills.

"We don't comment on rumour and speculation," a spokesperson for Kraft North America said. Nevertheless, the spokesperson admitted: "In some cases, there's more long-term shareholder value by existing a business, rather than investing in it. In evaluating, we look at growth potential, relative market share and profitability."

Officials at PepsiCo did not return a request for comment as just-food went to press.

One industry analyst flagged the possible sale of the Post business in July. Alexia Howard, an analyst at US bank Sanford C. Bernstein said Kraft could look to sell parts of its business in which it lags behind industry rivals.

"If I were in Irene's (Kraft CEO Irene Rosenfeld) shoes, I'd look at the areas in which Kraft does not have a competitive advantage," Howard told just-food.

"If you look across the Kraft portfolio, with its Post cereal business, it is a distant number three behind Kellogg and General Mills."