Canada Bread forms committee in wake of potential Maple Leaf sell-off
Maple Leaf Foods, that owns a 90% stake in Canada Bread, has said it is exploring strategic alternatives for its bakery business, including the sale of its majority Canada Bread share. It said a final decision will be made in early 2014.
Canada Bread’s special committee will be led by financial advisors CIBC World Markets and comprised of independent directors.
The task of the committee is to ensure all company shareholders are treated fairly and the company’s best interests considered should a sale take place, Canada Bread said in a statement.
However, the bread firm made clear that the committee was not confirmation of a sale.
“There can be no assurance that the process being undertaken by Maple Leaf will result in the consummation of any transaction,” it said.
“The Special Committee does not intend to comment further regarding the process being undertaken by Maple Leaf until such time that it deems disclosure appropriate,” it added.
Considering divestment
Maple Leaf is close to completing a seven-year growth project for its bakery segment and is considering other options as the final phase is set to end in 2015.
It said there are “significant growth opportunities” in the baked goods sector, but added this could be pursued as Maple Leaf or under new ownership.
“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,” said Maple Leaf president and CEO Michael H. McCain.
In its recent investor day, ahead of its potential divestment announcement, Maple Leaf’s chief operating officer (COO) Richard Lan told attendees that the opportunities to improve its bakery business are invigorating.
“It is a great business and we have a great position within that great business,” he said.
“Sadly we have plateaued our growth and we were somewhat over weighted toward commercial bread – we’re inspecting that with a great deal of introspection right now to see where we take it in the future.”
