Two Maple Leaf Directors Quit Over Strategic Plan

Two directors of Maple Leaf Foods, who represented a key shareholder, have resigned from the company’s board in a dispute related to the food processor’s strategic plan.

Wayne Kozun and William Royan represented the Ontario Teachers’ Pension Plan, which has about a 25 per cent stake in the big Canadian food processor. Earlier this year Teachers sold a 10 per cent stake in Maple Leaf to activist hedge fund West Face Capital.

The directors resigned in a disagreement related to Maple Leaf’s recently announced plan to drive up earnings through a massive capital investment in its plants, the company said in a release.

The Teachers’ representatives had asked that board minutes be changed to reflect that they approved the plan subject to a management analysis of prefunding options, specifically the sale of Maple Leaf’s rendering business.

The board instead confirmed its minutes, which showed unanimous approval for the plan.

Maple Leaf management has been under pressure from some shareholders over the performance of its stock, which had shown little growth until West Face bought its stake in August.

Teachers’ spokeswoman Deborah Allan confirmed its representatives have quit the Maple Leaf board but had no further comment.

Maple Leaf also reported a third-quarter loss Oct. 28 after taking pretax charges, but its adjusted earnings matched expectations, said analyst Robert Gibson of Octagon Capital.

Toronto-based Maple Leaf, which processes hogs and poultry and runs a large bakery operation, lost $16.1 million, or 12 cents a share, in the quarter to Sept. 30, after incurring $48.1 million of non-cash pretax adjustments.

Maple Leaf earned $22.5 million in the same quarter a year ago.

Chief executive Michael McCain said the company was grappling with rising raw grain and meat costs during the quarter.

Adjusted for one-time items, Maple Leaf reported earnings per share of 23 Canadian cents, up from 21 cents a year earlier.

Sales were little changed from the year-before quarter at $1.29 billion.

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