TORONTO, June 29 /PRNewswire-FirstCall/ - Maple Leaf Foods Inc. ("Maple Leaf" or the "Company") (TSX : MFI) announced today that it has entered into a shareholder rights plan agreement (the "rights plan"). The rights plan has been adopted coincident with the previously announced termination on June 30, 2010 of the shareholders agreement between the Company's two largest shareholders, McCain Capital Corporation ("MCC") and the Ontario Teachers' Pension Plan Board ("Teachers"). The board of directors has also formed a special committee comprised of seven directors who are independent of both MCC and Teachers to consider any matter that may arise as a result of the termination of the shareholders agreement. In that regard, the special committee recommended to the board of directors that the rights plan be adopted. The rights plan is effective immediately and is designed to allow the board of directors of Maple Leaf and its shareholders sufficient time to consider fully any transaction involving the acquisition or proposed acquisition of 20 percent or more of the outstanding voting common shares of the Company and any alternatives to such transaction that may arise and to ensure the fair treatment of shareholders should any such transaction be initiated. The rights plan was not adopted in response to an actual or anticipated transaction. The rights plan has a three year term, provided, however it will expire on the six month anniversary of its adoption should shareholder approval of the rights plan not be obtained prior to that time.
One right has been issued with respect to each voting common share and each non-voting common share of Maple Leaf issued and outstanding as of the close of business on June 29, 2010. These rights will become exercisable only when a person, including any party related to it, acquires or attempts to acquire 20 percent or more of the outstanding voting common shares of Maple Leaf without, among other things, complying with the "permitted bid" provisions of the rights plan or without approval of the board of directors of the Company. Should such an acquisition occur or be announced, each right would, upon exercise, entitle a rights holder, other than the acquiring person and related persons, to purchase voting common shares or non-voting common shares, as the case may be, of Maple Leaf at a 50 percent discount to the market price at the time.
Under the rights plan, a "permitted bid" is a bid made to all holders of the voting common shares of Maple Leaf and which is open for acceptance for not less than 60 days. If at the end of 60 days at least 50 percent of the outstanding voting common shares, other than those owned by the offeror and certain related parties have been tendered, the offeror may take up and pay for the shares but must extend the bid for a further 10 business days to allow other shareholders to tender.
Current shareholders of the Company that hold 20 percent of more of the voting common shares will not trigger the application of the rights plan provided that they do not increase their ownership of shares, except through one of the exemptions set out in the rights plan. The acquisition or proposed acquisition, other than by way of permitted bid or with the consent of the board of directors of the Company, by any person of the block of shares held by either MCC or Teachers in the Company would trigger application of the rights plan.
The TSX has advised the Company that it has accepted the rights plan for filing subject to the condition that shareholder approval is obtained within six months of its adoption.
A material change report and a complete copy of the rights plan will be filed by the Company on SEDAR.
Forward-Looking Statements --------------------------
This press release may contain forward-looking statements. These statements are not guarantees of future performance and involve assumptions and risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed, implied or forecasted in such forward-looking statements. Factors that could cause actual results or outcomes to differ materially from the results expressed, implied or forecasted by these forward-looking statements are discussed more fully in the Company's filings with the securities regulatory authorities, including its management's discussion and analysis, all of which are available on SEDAR at www.sedar.com. The Company does not intend, and the Company disclaims any obligation to update any forward-looking statements, whether written or oral, or whether as a result of new information, future events or otherwise except as required by law.
Maple Leaf Foods Inc. is a leading food processing company, headquartered in Toronto, Canada. The Company employs approximately 23,500 people at its operations across Canada and in the United States, the United Kingdom, and Asia. The Company had sales of $5.2 billion in 2009.
SOURCE Maple Leaf Foods Inc.