Grupo Bimbo to Acquire Canada Bread; Maple Leaf Foods to Support Transaction

TORONTO, Feb. 12, 2014 /CNW/ - Canada Bread Company, Limited (TSX: CBY) today announced that Grupo Bimbo, S.A.B. de C.V. of Mexico ("Grupo Bimbo") has agreed to acquire all of the issued and outstanding common shares of Canada Bread Company, Limited ("Canada Bread") for aggregate cash proceeds of $1.83 billion or $72.00 per share pursuant to an arrangement agreement (the "Arrangement Agreement") entered into between Canada Bread and Grupo Bimbo.

"This is an excellent outcome for our bakery businesses and shareholders," said Richard Lan, President and CEO. "Becoming part of Grupo Bimbo, the world's leading bakery company and benefiting from its focus, expertise and resources, will create new opportunities for our people, customers and business partners."

The Arrangement Agreement provides for the acquisition of all issued and outstanding common shares of Canada Bread pursuant to a statutory arrangement under the Business Corporations Act (Ontario) (the "Arrangement").  Under the terms of the Arrangement Agreement, Canada Bread is permitted to continue to pay quarterly dividends of up to $0.75 per share until the closing of the transaction (pro-rated for the actual number of days in the quarter in which the transaction closes).  Maple Leaf Foods Inc. ("Maple Leaf"), which owns approximately 90% of the outstanding common shares of Canada Bread, has entered into a voting support agreement with Grupo Bimbo (the "Voting Support Agreement") pursuant to which Maple Leaf has agreed to vote all of its common shares of Canada Bread in favour of the Arrangement at a special meeting of shareholders of Canada Bread called to consider the transaction.

Including the $8.00 per share dividend paid by Canada Bread to its shareholders on January 6, 2014, the $72.00 in cash per common share that Canada Bread shareholders will receive under the Arrangement represents a 31% premium to Canada Bread's closing price on the Toronto Stock Exchange of $61.25 on October 18, 2013 (the day prior to Maple Leaf's announcement that it was exploring strategic alternatives for its bakery business and Canada Bread's announcement that it had established a Special Committee of its board of directors in connection therewith), and a 34% premium to the 20-day volume-weighted average share price of $59.58 ending on October 18, 2013.

This transaction follows an exhaustive process undertaken by Maple Leaf, in cooperation with the special committee of independent directors of Canada Bread, to seek to maximize the value of Canada Bread.  The special committee of independent directors of Canada Bread received independent legal and financial advice and received a fairness opinion from CIBC World Markets Inc. to the effect that, as of the date of such opinion and subject to the assumptions, limitations and qualifications contained therein, the consideration to be received by Canada Bread minority shareholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to such shareholders.

The Arrangement, which has been approved by the boards of directors of Canada Bread and Grupo Bimbo, will require the approval of at least 66 2/3% of the votes cast by the shareholders of Canada Bread at a special meeting expected to take place in early April 2014. Pursuant to the Voting Support Agreement, Maple Leaf has agreed to vote its 90% interest in Canada Bread in favour of the Arrangement.

The transaction is also subject to receipt of court approval, regulatory approvals  (including Competition Act (Canada) and Investment Canada Act approvals and Hart Scott Rodino approvals in the United States) and other customary closing conditions.  An information circular (the "Circular") outlining details of the Arrangement and Special Meeting is expected to be mailed to shareholders of Canada Bread in early March 2014.  Copies of the Circular, the Arrangement Agreement and the Voting Support Agreement will be made available under Canada Bread's profile on SEDAR at www.sedar.com.  Subject to the satisfaction or waiver of the conditions to the Arrangement Agreement, the transaction is expected to close in the second quarter, 2014.

Investor Conference Call
Maple Leaf will host a conference call with the investment community today at 10:00 a.m. EST to discuss this announcement. To participate in the conference call, please call 416-340-2217 / 1-866-696-5910, Passcode 9965283. A playback will be made available following one hour after the event at 905-694-9451 / 1-800-408-3053, Passcode 1906742.  If you are unable to participate, the webcast will be archived and available on Maple Leaf's website at www.mapleleaffoods.com under the Presentations & Webcasts section.

About Canada Bread
Canada Bread is a leading manufacturer and marketer of value-added flour based products, including fresh bread, rolls, bagels and frozen partially baked or par-baked breads and bagels.  Canada Bread employs approximately 5,400 people at its bakery operations throughout Canada and in the United States and United Kingdom. Canada Bread is 90% owned by Maple Leaf Foods Inc. and its common shares are listed on the Toronto Stock Exchange under the ticker symbol CBY.

About Grupo Bimbo
Grupo Bimbo is one of the largest baking companies in the world in terms of production and sales volume. As the market leader in the Americas, Grupo Bimbo has 144 plants and more than 1,600 distribution centers strategically located in 19 countries throughout the Americas, Europe and Asia. Its main product lines include sliced bread, buns, cookies, snack cakes, English muffins, bagels, pre-packaged foods, tortillas, salted snacks and confectionery products, among others. Grupo Bimbo produces over 10,000 products and has one of the most extensive direct distribution networks in the world, with more than 52,000 routes and more than 126,000 employees. Grupo Bimbo's shares have traded on the Mexican Stock Exchange since 1980 under the ticker symbol BIMBO.

Forward Looking Statements
This document and statements made in the above noted conference call may contain "forward-looking information" within the meaning of applicable securities law.  Such statements include, but are not limited to statements regarding the expected timing of the completion of the sale of Canada Bread to Grupo Bimbo as contemplated by the Arrangement Agreement. There can be no assurances that any transaction will be completed. These statements are not guarantees of future events and involve assumptions and risks and uncertainties that are difficult to predict.  Actual results may differ materially from those expressed, implied or forecasted in such forward-looking information.  Some of the factors that could cause actual results or outcomes to differ materially from the results expressed, implied or forecasted by such forward-looking information, including some of the assumptions used in making such statements, is discussed more fully in Canada Bread's Annual Management's Discussion and Analysis for the period ended December 31, 2012 including the section entitled "Risk Factors", that are updated each quarter in the Management's Discussion and Analysis, and are available on SEDAR at www.sedar.com. Canada Bread does not intend to, and Canada Bread disclaims any obligation to, update any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE: Canada Bread Company, Limited

For further information:

Investor Contact: 
Nick Boland, Vice President Investor Relations
416-926-2005


Media Contact: 
David Bauer, Corporate Communications
416-926-2020