DBRS Puts WN on Review-Developing

DBRS has announced that it:

has today placed the ratings of George Weston Limited (GWL or the Company) Under Review with Developing Implications.

The action on GWL’s ratings is directly related to DBRS’s review of the ratings of Loblaw Companies Limited (Loblaw; see separate press release), which follows Loblaw’s announcement of an offer to acquire the shares of Shoppers Drug Mart Corporation (Shoppers) for $12.4 billion and the assumption of approximately $1 billion of debt (the Transaction).

The proposed financing, including GWL’s $500 million investment in Loblaw, would effectively reduce GWL’s voting ownership of Loblaw to approximately 46% from 63% at the end of F2012. That said, GWL intends to subsequently increase its ownership in Loblaw going forward.

GWL’s ratings reflect its holding in Loblaw and the Company’s own strong bakery brands and efficient operations, balanced by a continuing volatile input cost environment and the mature nature of the bakery industry.

DBRS will resolve its review of GWL at the same time as its review on Loblaw’s ratings. Should Loblaw’s ratings be confirmed or downgraded, similar rating action would likely follow for GWL. Any positive rating action for Loblaw in the medium to longer term would not necessarily result in the same for GWL.

The bid for Shoppers was reported this morning.

Weston has four preferred share issues outstanding, WN.PR.A, WN.PR.C, WN.PR.D and WN.PR.E, all Straight Perpetuals.

2 Responses to “DBRS Puts WN on Review-Developing”

  1. […] move follows the moves by DBRS to place both WN and L on […]

  2. […] The onset of the Review-Developing was reported on PrefBlog. […]

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