TORONTO (Reuters) – A newspaper report saying the Ontario Teachers’ Pension Plan is looking to sell its stake in Maple Leaf Foods Inc <MFI.TO sent shares in the food company down 4 percent on Tuesday.
The 35.3 pct stake, worth about C$450 million ($425 million), is the pension fund’s largest single holding of a listed company in Canada, the Globe and Mail newspaper said.
Teachers’ plan to sell its stake will likely overhang Maple Leaf shares until it finds a buyer, said analyst Bob Gibson of Octagon Capital Corp. However, it’s likely a good time to find one, with Maple Leaf trying to sell its Burlington, Ontario, pork-processing plant and with meat prices strong, he said.
“The (selling) environment is very good and that could be why Teachers’ is doing what they’re doing,” Gibson said. “Hopefully, the high point is coming.”
A sale would end the pension fund’s 15-year partnership with the McCain family, which controls Maple Leaf, one of Canada’s biggest food producers, said the Globe report.
Teachers’ and the McCains have owned a controlling stake in Maple Leaf since 1995, when the pension fund backed the family’s takeover bid for the food company.
An exit by the C$96 billion pension fund manager would not likely affect Maple Leaf’s direction, which the McCain family has set, Gibson said.
Maple Leaf’s plan to move away from products such as fresh pork, which are subject to volatile prices, and reduce its vulnerability to currency fluctuations is sound, Gibson said.
Maple Leaf shares on the Toronto Stock Exchange were down 39 Canadian cents or 4.1 percent at C$9.12 on Tuesday morning.
Teachers’ spokesman Jim Leech declined to comment on the report. A Maple Leaf spokeswoman was not immediately available for comment.