Food Giants Eye Maple Leaf Foods
International food giants are reported to be eyeing Maple Leaf Foods, Canada’s largest processor of meat and baked goods, in an attempt to lock up food sources for expanding emerging markets, including China.
Virginia-based Smithfield Foods Inc., the world’s largest hog producer, is said to have expressed interest in the company. More recently, sources said other U.S. and Asian companies have cast their eyes on the Toronto company, but it is unclear whether Maple Leaf Foods has entered any negotiations, according to the Globe and Mail.
U.S. food producers Kraft Foods Inc., Hormel Foods Corp. and Mexican baked goods company Grupo Bimbo are actively searching for acquisitions and Maple Leaf Foods may represent an attractive investment. It is believed that several Chinese buyers are also looking to acquire food producers.
In apparent anticipation of a transaction, the company’s stock price has risen steadily in recent days. It closed at 40 cents on Thursday at $13.93 after nearly 1 million shares changed hands, the highest trading volume since March when Smithfields made a confidential offer.
Chief Operating Officer Michael McCain owns 33% of the company and about 10-per-cent owned WestFace Capital, a Toronto hedge fund founded by shareholder activist Greg Boland. Sources said McCain has indicated an interest in selling at least some of his holdings following a recent divorce settlement.
Maple Leaf Report