Maple Leaf mulls sale of bakery unit
Deal may include 90% interest in Canada Bread
TORONTO Maple Leaf Foods is considering selling its bakery business in an effort to get the most out of the operations, and that could include the sale of its 90 per cent interest in Canada Bread.
Chief executive Michael McCain said Monday that while the company hasn’t decided the fate of the bread assets, a sale is on the short list of possibilities.
“We started a process to consider alternatives,” he said in an interview.
If a deal materializes, popular brands like Dempster’s, Tenderflake, and Olivieri pastas would find in the hands of a new owner.
Maple Leaf has been scouring its operations for cost savings as part of a seven-year restructuring plan that would improve the profits of the overall business, which is primarily focused on meat products.
“The bakery business performance has plateaued — at a high level, but plateaued over the course of the last few years,” McCain said.
A decision to court potential buyers comes after Maple Leaf found that revamping its bread operations over the next five years would involve further cost cutting and expansion plans that “require resources, focus and management time and effort,” McCain said.
Meanwhile, shareholders appeared optimistic that a deal would be carved out, with Maple Leaf stock up $1.39, or 10.5 per cent, to close at $14.69 Monday.