Maple Leaf Foods exploring strategic alternatives for its bakery business
Maple Leaf Foods announced that it is exploring strategic alternatives for its Bakery business, including a potential sale of the company's 90% ownership interest in Canada Bread Company Ltd.
Maple Leaf embarked on a strategy seven years ago to increase scale, productivity and profitability in its protein operations. The company is now in the final phase of executing this strategy, which is on track to be completed by 2015 and is expected to deliver significant returns to shareholders.
Maple Leaf has recently completed a comprehensive review of opportunities to accelerate profitable growth across its global Bakery business, which it conducts through its 90% owned subsidiary, Canada Bread. Before committing organizational focus, investment and resources to implement this strategy, Maple Leaf's Board and management have decided to explore other strategic alternatives, including a sale of the company's 90% interest in Canada Bread, a process that is expected to conclude in early 2014. There are significant growth opportunities in the baked goods sector that may be pursued, either as part of Maple Leaf or under new ownership. Maple Leaf believes that either outcome would result in a strong commitment to realizing the full potential of this business.
"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 Michael H. McCain, President and CEO. "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."
David L. Emerson, Chair of the Maple Leaf Board, said, "The Board and management are united in supporting this process, which will ensure we make the best decision for Maple Leaf while continuing to pursue the significant growth opportunities in our value- added, branded meat business."
Maple Leaf has 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.
There can be no assurance that the process being undertaken by Maple Leaf will result in the consummation of any transaction. No decision to sell Maple Leaf's interest in Canada Bread has been made and Maple Leaf may ultimately conclude that it will not sell its interest in Canada Bread. After completion of the conference call referenced below, Maple Leaf does not intend to comment further regarding the process being undertaken until such time that it deems disclosure appropriate.
Source: Maple Leaf Foods