Canada Bread Co. Ltd.
has launched an investigation into allegations that a senior executive
of its U.K. bakery operations may have tried to influence the pricing
of a competitor, Mr. Bagel Ltd.
Canada
Bread, 90 per cent owned by Maple Leaf Foods Inc., said the allegations
by Mr. Bagel of attempted price fixing follow the collapse of takeover
negotiations.
“While these allegations are unproven they are serious, and we are
taking all precautionary steps to fully investigate this matter and
determine the facts,” stated Canada Bread CEO Richard Lan.
Lan said Canada Bread began negotiations to acquire Mr. Bagel in
October, the main terms of the transaction were settled, and Canada
Bread “was involved in intensive due diligence which appears to have
extended to the discussion of pricing strategies to be implemented
after the acquisition.”
Negotiations ended this month “when Mr. Bagel sought to significantly
raise the selling price of the business late in the process,” Lan said,
and the managing director of Mr. Bagel now has made price-fixing
allegations to the news media and to Britain's Office of Fair Trading.
The managing director of Canada Bread’s U.K. bakery operations has been suspended during the investigation.
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