George Weston (WN) announced on Tuesday that it has reached a definitive agreement to sell its Weston Foods fresh and frozen bakery businesses to affiliated entities of FGF Brands for a total cash consideration of C$1.2 billion.
George Weston, which has significant stakes in Loblaw Companies (L) and Choice Properties REIT (CHP.UN), put its Weston Foods bakery business up for sale in March to focus on its retail and real estate businesses.
The fresh and frozen bakery business accounted for approximately 75% of Weston Foods’ net sales in 2020. George Weston added that it remains committed to selling its remaining ambient business, which includes cookies, cones, crackers and waffles.
George Weston Chairman and CEO Galen G. Weston said, “The Weston Foods business has been the foundation for the Weston Group in Canada since its establishment in 1882 and the decision to sell it was a difficult one.
“However, we are pleased that the purchaser of the fresh and frozen businesses is FGF, another long-standing family business with a strong presence in bakery and a significant footprint in Canada.”
The transaction is subject to certain regulatory requirements, including Canada’s Competition Act. George Weston plans to close it before the end of the first quarter of 2022. (See Analysts’ Top Stocks on TipRanks)
On September 29, TD Securities analyst Michael Van Aelst initiated coverage of George Weston with a Buy rating, and C$165 price target. This implies 18.9% upside potential.
The rest of the Street is optimistic on WN, with a Strong Buy consensus rating based on five Buys and one Hold. The average George Weston price target of C$146.83 implies 5.4% upside potential to current levels.
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