Maple Leaf Foods exploring potential sale of Canada Bread stake
Review of "strategic alternatives" could lead to sale of Maple Leaf's 90 per cent stake in Canada Bread
TORONTO—Canada Bread Co., Ltd. has established a special committee after parent company Maple Leaf Foods said it is exploring “strategic alternatives” that could lead to a sale of its majority stake in the bakery business.
While Maple Leaf said there is no clear indication that any transaction will take place as a result of its exploratory process, Canada Bread’s board of directors isn’t taking any chances, establishing a special committee “to ensure that all Canada Bread shareholders are treated fairly and that the company’s interests are taken into account during any such process that may affect Canada Bread.”
Maple Leaf has warned the process could result in the sale of its 90 per cent interest in Canada Bread.
The exploration of strategic alternatives is the final step in Maple Leaf’s profit griwth and productivity strategy launched seven years ago.
The process is expected to conclude in early 2014.
“We are confident that our bakery business can deliver significantly higher levels of profitable growth; the only question is how best to realize the future value of this business,” Maple Leaf president and CEO Michael H. McCain said in a statement.
“The recently completed bakery strategy will require organizational focus and resources to implement. This process gives us the opportunity to determine the best path forward for Maple Leaf, our shareholders and our Bakery business.”
Maple Leaf said it has also established a committee of independent directors to oversee the process and recommend the use of proceeds in the event of a sale, which may include a combination of debt repayment, reinvestment in the business and returning capital to shareholders.