By Greg Roumeliotis and Olivia Oran
Oct 25 Maple Leaf Foods Inc has
launched an auction for its bakery company Canada Bread
, targeting Grupo Bimbo, one of the world's
largest bread makers, as well as private equity, several people
familiar with the matter said.
Canadian food processor Maple Leaf said on Monday it would
explore selling its 90 percent stake in Toronto-based Canada
Bread, a global company with a C$1.75 billion ($1.68 billion)
market value, in a review process that is expected to be
completed by early 2014.
Since then, Royal Bank of Canada and Centerview
Partners LLC, which are handling the auction, have made initial
contact with prospective buyers before sending out detailed
financial information, the sources said this week.
Those contacted include Mexico's Bimbo as well as some of
the world's largest private equity firms, including KKR & Co LP
and Apollo Global Management LLC, the sources
said, although it remained to be seen whether they would submit
The people asked not to be identified because details of the
auction are confidential. Maple Leaf, Canada Bread, KKR and
Apollo declined to comment. Royal Bank of Canada and Centerview
did not respond to requests for comment.
A maker of bread, rolls, bagels and sweet goods, Canada
Bread is one of two dominant Canadian bakers, along with food
producer George Weston Ltd.
To find a strategic buyer, Maple Leaf would likely have to
go outside Canada to avoid competition concerns, Maple Leaf
Chief Executive Michael McCain said this week, a move that will
eventually require the approval of the Canadian government.
South of the Canadian border, the U.S. bakery industry is
dominated by Flowers Foods Inc and Bimbo.
In the event of a sale of Canada Bread, Maple Leaf has said
it would use the proceeds to pay down debt, reinvest in its
business and return capital to shareholders.
Maple Leaf, one of Canada's largest food processors, has
been focused on selling parts of its businesses in an attempt to
restructure under a multi-year plan.
The auction for Canada Bread comes three years after the
company's board came under fire from activist investor West Face
Capital, which criticized Maple Leaf's corporate governance.
In August, Maple Leaf inked a deal to sell its rendering
business Rothsay to Darling International Inc for C$645
million. Canada Bread also said earlier this week that it would
sell its fresh pasta business Olivieri to Spain's Ebro Foods SA
for C$120 million.