Grupo Bimbo to Buy Canada Bread for $1.7 Billion By WILLIAM ALDEN
 Tony Cenicola/The New York Times Grupo Bimbo already has a number of well-known bread brands, including Thomas’ English muffins.
Grupo Bimbo, the Mexican baking giant, is expanding across North American for its latest bread deal.
The company has agreed to buy Canada Bread, a Toronto-based baking company that is 90 percent owned by Maple Leaf Foods, for $1.83 billion Canadian dollars, or $1.67 billion, according to an announcement on Wednesday.
Including a recent dividend paid by Canada Bread, the offer of 72 Canadian dollars a share represents a 31 percent premium over the company’s closing price on Oct. 18, the day before Maple Leaf said it was exploring strategic options for the business. It is also a 34 percent premium over the 20-day volume-weighted average stock price ending Oct. 18.
Maple Leaf has agreed to vote its shares in favor of the deal, Canada Bread said in its announcement. Investors appear to be expecting the deal to go through, sending shares of Canada Bread, which is listed on the Toronto Stock Exchange, up 7 percent on Wednesday to 72.05 Canadian dollars.
Grupo Bimbo already has a number of well-known bread brands in its portfolio, including parts of Entenmann’s, Thomas’ English muffins and Sara Lee bakery. In 2012, it was seen as a potential suitor for Hostess Brands.
Its deal for Canada Bread, subject to regulatory approval, is expected to close in the second quarter of this year. Under the deal’s terms, Canada Bread can pay quarterly dividends of up to 75 Canadian cents a share until the transaction closes.
“This is an excellent outcome for our bakery businesses and shareholders,” Richard Lan, the president and chief executive of Canada Bread, said in a statement. “Becoming part of Grupo Bimbo, the world’s leading bakery company, and benefiting from its focus, expertise and resources, will create new opportunities for our people, customers and business partners.”
A special committee of independent directors of Canada Bread received legal and financial advice, as well as a fairness opinion, from CIBC World Markets.
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