UPDATE 3-Mexico's Bimbo eyes Weston unit as credit revised
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MEXICO CITY, Dec 4 (Reuters) - Mexican breadmaker Bimbo said it is in talks to buy the U.S. business of a subsidiary of Canada's George Weston Ltd. but concerns the company may fund the deal with debt put its credit ratings under revision.
Bimbo (BIMBOA.MX), one of the world's biggest breadmakers, said on Thursday it is seeking to buy the U.S. breadmaking operations of Dunedin Holdings Sarl, a unit of George Weston (WN.TO).
"The company cannot assure that this transaction will happen as a result of these talks," Bimbo said in a statement to the Mexican stock exchange.
Bimbo shares zigzagged for most of the session, trading 0.28 percent higher at 60 pesos Thursday afternoon.
Both Bimbo and George Weston declined further comment.
Agency Standard & Poor's placed all of its ratings on Bimbo debt on credit watch, with negative implications, citing the George Weston talks news.
"If the acquisition is debt financed and the amount of debt is substantial, Bimbo's credit measures will weaken and its ratings could be negatively affected," S&P analyst Enrique Gomez Tagle said in a report.
According to the rating agency, Bimbo's total debt outstanding was about $1.022 billion as of Sept. 30.
Bimbo sells its products, ranging from pastries and tortillas to peanuts, in Latin America, Europe and Asia.
Its third-quarter net profit, reported in late October, rose 9 percent helped by stronger sales on higher prices.
Several Mexican companies have recently faced trouble paying their debt due to the global financial crisis that is also making it more difficult for corporations to access loans. (Reporting by Cyntia Barrera Diaz and Jason Lange; Editing by Bernard Orr)
