Ontar io Teachers’ Pension Plan will sell its entire 25 per cent stake in Maple Leaf Foods at a sharp discount, ending the fund’s longtime role in one of Canada’s top food processors.
Teachers’ said Nov. 23 it will sell its 34.5 million shares at $10.50 each to underwriters BMO Capital Markets and TD Securities to complete a secondary offering worth more than $362 million. The price is a discount of 17 per cent to Maple Leaf’s finish at $12.69 on the Toronto Stock Exchange on Nov. 23.
The pension fund has moved to whittle down its stake in Maple Leaf – once its largest single holding of a listed company in Canada – since this summer, as it looks to divest some Canadian holdings.
Within the last four months, Teachers’ has cut its stake in Maple Leaf twice, from more than one-third to zero, following a sale in August to hedge fund West Face Capital and then Tuesday’s secondary offering.
Maple Leaf unveiled a $1.29 billion capital plan last month to upgrade some plants and close others as it tries to narrow the gap with lower-cost U.S. rivals.
The company’s shares, which were halted before the news, have not recovered since a deadly tainted meat scandal in 2008, however they have appreciated about 40 per cent since early August on expectations that activist investor West Face would effect positive change.