Leaf” or the “Company”) today announced that
C.V
and outstanding common shares of
Bread”) for aggregate cash proceeds of
share pursuant to an arrangement agreement (the “Arrangement
Agreement”) entered into between
Leaf currently holds approximately 90% of the outstanding shares of
transaction.
“This transaction maximizes the value of our investment in
and focuses Maple Leaf on building its leadership in the consumer
packaged meats business,” said
“Grupo Bimbo is an excellent company with strong values and a global
leadership position, with little overlap in our geographic markets.
This makes for a highly complementary fit with our bakery operations
and is expected to provide exciting opportunities for
employees, customers and other business partners.”
Mr. McCain added, “Upon completion of our prepared meats strategy at the
end of 2014, Maple Leaf intends to capitalize on its state-of-the-art
network, market-leading brands and a strong balance sheet to build on
our position as
within and beyond our borders.”
The Arrangement Agreement provides for the acquisition of all issued and
outstanding common shares of
arrangement under the Business Corporations Act (
Agreement,
dividends of up to
(pro-rated for the actual number of days in the quarter in which the
transaction closes). Maple Leaf has entered into a voting support
agreement with Grupo Bimbo pursuant to which Maple Leaf has agreed to
vote all of its common shares of
Arrangement at a special meeting of shareholders of
called to consider the transaction. Maple Leaf has also agreed to
provide certain transition services at its cost to Grupo Bimbo after
closing and has agreed to a non-competition covenant in favour of
Bimbo in respect of the
On closing, gross proceeds to Maple Leaf from its 90% ownership,
excluding any dividends received will be approximately
Maple Leaf expects cash costs related to the transaction to be
approximately
settlements on debt repayment, advisor fees and other costs.
Including the
shareholders on
that
represents a 31% premium to
Stock Exchange
Leaf’s announcement that it was exploring strategic alternatives for
its bakery business and
established a Special Committee of its board of directors in connection
therewith), and a 34% premium to the 20-day volume-weighted average
share price of
This transaction follows an exhaustive process undertaken by Maple Leaf,
in cooperation with the special committee of
maximize the value of Canada Bread. The board of directors of Maple
Leaf has received fairness opinions from its financial advisors,
Capital Markets
consideration to be received by Maple Leaf in the Arrangement is fair
from a financial point of view to Maple Leaf.
The Arrangement, which has been approved by the boards of directors of
2/3% of the votes cast by the shareholders of
meeting expected to take place in early
agreed to vote its 90% interest in
Arrangement.
The transaction is also subject to receipt of court approval, regulatory
approvals (including Competition Act and Investment Canada Act
approvals and Hart Scott Rodino approval in
other customary closing conditions. An information circular outlining
details of the Arrangement and Special Meeting is expected to be mailed
to shareholders of
satisfaction or waiver of the conditions to the Arrangement Agreement,
the transaction is expected to close in the second quarter, 2014.
Maple Leaf is in the final phase of implementing a strategy to
significantly increase productivity and profitability in its prepared
meats business through establishing a low-cost, highly efficient
manufacturing and distribution network. The Company has entered the
peak phase of completing this strategy. Coupled with poor protein
market conditions, this network transition significantly impacted
earnings in 2013 and particularly in the fourth quarter. Once execution
of this strategy is completed, involving closing down six older
facilities, Maple Leaf expects to realize significant benefits from
increased productivity and lower overhead and operating costs.
Management does not expect the sale of its interest in
materially affect its 2015 EBITDA margin target of 10%.
A special committee that included all of the independent directors of
Maple Leaf was established to oversee the strategic review process and
recommend the optimal use of proceeds to benefit both the Company and
its shareholders, which will include some combination of debt
repayment, supporting growth in its consumer packaged meats business
and return to shareholders. Following consideration of the
alternatives, the board of directors of Maple Leaf intends that the
return to Maple Leaf shareholders of any available proceeds from the
sale of
bids. The timing, structure, price and other terms of each issuer bid
will be determined by the independent directors. In addition and in
order to protect the interests of minority shareholders, any such
issuer bid will comply with the terms of Multilateral Instrument
61-101, be conducted pursuant to a “Dutch Auction” and be subject to a
minimum deposit condition that more than 50% of the Maple Leaf
shareholders other than
it is determined that any one or more issuer bids could result in
material adverse consequences to Maple Leaf and/or its shareholders,
the board of directors would consider alternative means of returning
proceeds to shareholders that would be intended to have the same
effect.
Investor Conference Call Details
Maple Leaf Foods will host a conference call with the investment community today at
conference call, please call 416-340-2217 / 1-866-696-5910, Passcode
9965283. A playback will be made available following one hour after the
event at 905-694-9451 / 1-800-408-3053, Passcode 1906742. If you are
unable to participate, the webcast will be archived and available on
the Company’s website at www.mapleleaffoods.com under the Presentations & Webcasts section.
About Maple Leaf
headquartered in
19,500 people at its operations across
the
About
based products, including fresh bread, rolls, bagels, and frozen
partially baked or par-baked breads and bagels.
owned by Maple Leaf and its common shares are listed on the
Stock Exchange
About Grupo Bimbo
Grupo Bimbo is one of the largest baking companies in the world in terms
of production and sales volume. As the market leader in the
Grupo Bimbo has 144 plants and more than 1,600 distribution centers
strategically located in 19 countries throughout the
and
snack cakes, English muffins, bagels, pre-packaged foods, tortillas,
salted snacks and confectionery products, among others. Grupo Bimbo
produces over 10,000 products and has one of the most extensive direct
distribution networks in the world, with more than 52,000 routes and
more than 126,000 employees. Grupo Bimbo’s shares have traded on the
Forward Looking Statements
This document and statements made in the above noted conference call may
contain “forward-looking information” within the meaning of applicable
securities law. Such statements include, but are not limited to,
expectations regarding the timing and outcome of the protein
transformation strategy including the EBITDA margin targets for 2015,
statements regarding the timing of the completion of the sale of
Bread
any use of proceeds flowing from such transaction. There can be no
assurances that any transaction will be completed. These statements are
not guarantees of future events and involve assumptions and risks and
uncertainties that are difficult to predict. Actual results may differ
materially from those expressed, implied or forecasted in such
forward-looking information. Some of the factors that could cause
actual results or outcomes to differ materially from the results
expressed, implied or forecasted by such forward-looking information,
including some of the assumptions used in making such statements, is
discussed more fully in the Company’s Annual Management’s Discussion
and Analysis for the period ended
section entitled “Risk Factors”, that are updated each quarter in the
Management’s Discussion and Analysis, and are available on SEDAR at www.sedar.com. Maple Leaf does not intend to, and Maple Leaf disclaims any obligation
to, update any forward-looking information, whether as a result of new
information, future events or otherwise, except as required by law.
SOURCE
Investor Contact:
Michael Vels, Chief Financial Officer
416-926-2048
Media Contact:
David Bauer, Corporate Communications
416-926-2020