Back to Media

Canada Bread Proposed $106 Million Private Equity Placement

Toronto, Ontario – Maple Leaf Foods Inc. (TSX:MFI)
and Canada Bread Company, Limited (TSX:CBY) today announced that Maple Leaf
Foods has offered to purchase four million common shares from Canada Bread
Company, Limited at  $26.50 per share in a private placement. (This is not
a general offer to purchase shares held by Canada Bread shareholders.  It
is an offer to purchase treasury shares from Canada Bread). The price
represents a 24% premium (about $20 million in aggregate for the 4 million
shares) to the 10 day average closing price for Canada Bread common shares.

Maple Leaf Foods’ financing offer is open for acceptance by
Canada Bread until January 10, 2003.  The financing offer is conditional
on the shareholders of Canada Bread, other than Maple Leaf Foods, approving, on
December 11, 2002, the resolution to purchase Maple Leaf Foods’ other bakery
operations at the Special Meeting of Shareholders of Canada Bread to be held on
December 11, 2002. There are no other conditions to this financing offer. The
Board of Directors of Canada Bread will consider the financing offer based on a
recommendation from its independent Directors.

Maple Leaf Foods decided to extend the financing offer in
response to specific comments received from a number of Canada Bread’s
institutional shareholders on the proposed purchase by Canada Bread of Maple
Leaf Foods’ other bakery operations.

“By extending this financing offer to Canada Bread, we are
demonstrating our long-term commitment to Canada Bread, and our conviction that
Canada Bread will benefit from purchasing our other bakery operations,” said
Tom P. Muir, Chief Financial Officer of Maple Leaf Foods.  He added: “The
financing would also significantly strengthen Canada Bread’s balance sheet
following the purchase. The purchase is anticipated to be accretive to Canada
Bread’s earnings after this financing.”

The Canada Bread Special Meeting of Shareholders to vote on
the proposed acquisition of Maple Leaf Foods’ other bakery operations is being
held at 3:00 p.m. on December 11, 2002 at the Metro Toronto Convention Centre,
255 Front Street West, Room 203BD, Toronto, Ontario.

Maple Leaf Foods Inc. is a leading Canadian food processing
company committed to delivering quality food products to consumers around the
world.  Headquartered in Toronto, Canada, the Company employs more than
15,000 people at its operations across Canada and in the United States, Europe
and Asia.  Maple Leaf Foods had sales of $4.7 billion in 2001.

Canada Bread Company, Limited is a leading Canadian
manufacturer of value-added flour-based products and fresh pasta to the retail
and food service markets.  Canada Bread maintains a national presence in
the marketplace with four principal brand names:  Dempster’s ä, POM ä,
Olivieri ä and Tenderflake ä.