Canadian food group Maple Leaf Foods is looking to potentially offload its controlling stake in Canada Bread as it looks to build top-line growth from its prepared meats business.
The company said today (21 October) it is “exploring strategic alternatives” for its bakery business, including a potential sale of its 90% ownership interest in Canada Bread Co.
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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, it said.
“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 CEO Michael McCain. “The recently completed bakery strategy will require organisational 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.”
Maple Leaf’s share price jumped 10.45% to C$14.70 on the announcement.
In the event of a sale, the company said it would consider using the cash to pay down debt, reinvest in the business and return capital to shareholders.
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