UPDATE 2-Maple Leaf tumbles on Teachers’ selloff report

* Pension fund shopping 35 pct stake in food company-report

* Maple Leaf shares off 2.7 percent at C$9.25

* Pressure seen remaining on stock until stake sold
(Adds Maple Leaf comment, updates stock)

TORONTO, June 8 (BestGrowthStock) – A newspaper report saying the
Ontario Teachers’ Pension Plan is looking to sell its stake in
Maple Leaf Foods Inc nearly 3 percent on Tuesday.

The 35.3 pct stake, worth about C$450 million ($429
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.

Any change in Teachers’ stake concerns an agreement between
the pension fund and McCain Capital Corp, which Maple Leaf is
not privy to, said Lynda Kuhn, senior vice-president of
communications for Maple Leaf. That agreement expires at the
end of this month, according to the Globe report.

“We’re not going to speculate on what Teachers’ may or may
not do with their investment once that agreement expires,” she

Maple Leaf has been hit hard in recent years by the rising
Canadian dollar, a run-up in farm commodity prices and listeria
contamination in some of its deli meats in 2008, which was
linked to at least 20 deaths.

“I think, ultimately, what shareholders are looking for is
a company with a strong value-creation strategy that it can
deliver on and we feel very confident that we have and we
will,” Kuhn said.

An exit by the C$96 billion pension fund manager would not
likely affect the direction for Maple Leaf that the McCain
family has set, Gibson said.

The company’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 fell as
much as 4.7 percent on Tuesday before recovering somewhat to
C$9.25, down 26 Canadian cents or 2.7 percent.

Teachers’ spokespeople declined to comment on the report.
The fund administers the pensions of about 290,000 active and
retired teachers in the province of Ontario.


($1=$1.05 Canadian)
(Reporting by Rod Nickel, Pav Jordan and Euan Rocha; editing
by Rob Wilson)

UPDATE 2-Maple Leaf tumbles on Teachers’ selloff report