Canada Bread investigates Mr. Bagel acquisition
December 08, 2008
by Eric Schroeder
TORONTO — 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.
"We have been operating under the premise that we were in the late stages of acquiring this business," said Richard Lan, president and chief executive officer of Canada Bread. "While these allegations are unproven they are serious, and we are taking all precautionary steps to fully investigate this matter and determine the facts."
Canada Bread had entered negotiations to acquire Mr. Bagel in October and the main terms of the transaction had been agreed to. But negotiations ceased earlier this month after Mr. Bagel sought to significantly raise the selling price of the business.
According to Canada Bread, the two companies were late in the discussion talks and had exchanged detailed information, which appears to have extended to the discussion of pricing strategies to be implemented after the acquisition.