Canada’s Maple Leaf Foods yesterday [Tuesday] reported it would purchase four million shares in its Canada Bread division.

Maple Leaf Foods will pay C$106m (US$68.2m) in the private placement at $26.50 per share. The deal involves the purchase of treasury shares from Canada Bread, and is being undertaken to enable it to buy Maple Leaf’s bakery division, reported Reuters.

The move follows an announcement from Canada Bread last October in which it stated that it would purchase Maple Leaf’s baking activities in their entirety and bring them together in a deal worth some $266m including the acquisition of debt.

Maple Leaf stated that the price represented a 24% premium to the ten-day average closing price for Canada Bread common shares. Canada Bread has until 10 January 2003 to accept the offer. Shareholders are due to meet on Tuesday to discuss the offer.

Canada Bread is presently 68%-owned by Maple Leaf, a large manufacturer with trademarks including Olivieri and Tenderflake.