Maple Leaf Foods has criticised key investor West Face Capital after the activist hedge fund called for the Canadian food group to improve its corporate governance.
West Face, which owns around 10% of Maple Leaf, has demanded that the bakery-to-deli meats business hold a special meeting to allow shareholders to vote on a series of resolutions the fund has put forward.
In its request for the special meeting, West Face claimed Maple Leaf has “deficiencies” in “board independence and corporate governance”.
The demands include a reduction in the size of Maple Leaf’s board and urge for at least two-thirds of the company’s directors to be independent.
The move from West Face is the latest sign of investor unease at Maple Leaf and come just weeks after another shareholder, The Ontario Teachers Pension Plan, said it would sell its 25.2% stake in the business.
In a statement responding to West Face’s demands, Maple Leaf said it had already started a review of its corporate governance and said the fund had launched a “costly and unnecessary process”.
“Maple Leaf Foods has an outstanding board, is recognized for the strength of its corporate governance which is dominated by some of Canada’s leading independent directors and has always been committed to continuous improvement,” said James Hankinson, chairman of the corporate governance committee of the Maple Leaf board. “In fact, the board had already committed to a proactive process designed to result in constructive board renewal.”
Hankinson added: “Today’s statement by West Face and its decision to launch what we believe is a costly, and unnecessary process, knowing full well the Board was already commissioning such a review including soliciting their input, is unproductive and contrary to the best interest of Maple Leaf Foods and its shareholders.”
Maple Leaf said it would review West Face’s demands and “provide further comment in due course”.