Canada's Maple Leaf Foods to sell turkey farms

Mon Jul 22, 2013 10:32am EDT
 
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July 22 (Reuters) - Meat processor Maple Leaf Foods Inc , its stock at multiyear highs on talk that it might be a takeover target, plans to sell its Ontario turkey farms and hatchery.

Toronto-based Maple Leaf, one of Canada's largest poultry and hog processors, said on Monday it will sell a hatchery and six breeder farms that produce eggs and day-old turkeys to Cuddy Farms Limited. Six commercial farms will be sold to Ernald Enterprises Limited, already a turkey supplier to Maple Leaf.

The company's shares rose 1.8 percent, or 27 Canadian cents, to C$15.72 in early trading in Toronto, touching a nearly six-year high and continuing a steady climb since reports in June that it had been approached about a potential takeover by U.S. rival Smithfield Foods.

Instead, China's Shuanghui International Holdings agreed to buy Smithfield for $4.7 billion, however Maple Leaf stock remains well-supported on thoughts that others may be interested.

Maple Leaf said Ernald agreed to continue supplying Maple Leaf with live turkeys for its processing facility in Thamesford, Ontario. Other terms of the deals, which are expected to close by the end of July, were not released.

Maple Leaf has for several years closed older pork-processing plants and invested in others as it tries to boost its profits and better compete with U.S. rivals.