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Grupo Bimbo of Mexico to buy Canada Bread

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Staff writer ▼ | February 14, 2014
Canada Bread Company said that Grupo Bimbo, S.A.B. de C.V. of Mexico has agreed to acquire all of the issued and outstanding common shares of Canada Bread for aggregate cash proceeds of $1.83 billion or $72 per share.
Canada Bread
Canada BreadCanada Bread Company said that Grupo Bimbo, S.A.B. de C.V. of Mexico has agreed to acquire all of the issued and outstanding common shares of Canada Bread for aggregate cash proceeds of $1.83 billion or $72 per share.


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). 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., which owns approximately 90% of the outstanding common shares of Canada Bread, has entered into a voting support agreement with Grupo Bimbo 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 per share dividend paid by Canada Bread to its shareholders on January 6, 2014, the $72 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, and a 34% premium to the 20-day volume-weighted average share price of $59.58 ending on October 18, 2013.

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.


 

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