Canadian food group Maple Leaf Foods is looking to adopt a poison pill plan that could be used to fend off a hostile takeover approach for the company.
Maple Leaf said yesterday (28 July) that its board had voted to bring in a “rights plan” that would see shares in the company offered at discount if a hostile suitor looked to buy at least 20% of the business.
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The company said the rights plan was not introduced “in response to any actual or anticipated transaction” but would allow the board and shareholders “sufficient time” to consider a move for a fifth of its shares.
If a suitor does buy or try to buy 20% of Maple Leaf without making an offer to all shareholders or without securing approval from the board, investors will be able to buy new shares in the company at a 50% discount.
The publication of the plan came alongside another corporate announcement from Maple Leaf, which said that president and CEO Michael McCain was set to buy almost a third of the company.
The baker and meat processor said Mr McCain would acquire the 31.3% stake held in the business by a family fund, McCain Capital Corp.
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By GlobalDataThe fund, which acquired Maple Leaf in 1995, was headed by Mr McCain’s father, who passed away in May.
When Mr McCain acquires the shares from McCain Capital Corp, he will hold a 31.9% stake in Maple Leaf.
Maple Leaf also announced a new “governance agreement” that will see its shareholders have the power to nominate directors in a number proportionate to their stake in the business. Maple Leaf’s board has 13 directors, meaning that Mr McCain will be able to put forward four nominees.
Last year, Maple Leaf faced criticism over its corporate governance from activist hedge fund West Face Capital, which owns 11% of the company.
In February, Maple Leaf handed a seat on the board to West Face CEO Gregory Boland in a bid to quell those concerns.
Maple Leaf also yesterday announced its half-year results. The company’s profits rose despite falling sales, thanks, it said, to price increases and cost control.
