Other parties involved in the auction of the roughly $1.8 billion bakery company — including private equity firms KKR + Co. and Bain Capital, as well as U.S.-based Flowers Foods — are no longer actively pursuing a deal, the sources said.

A purchase of Canada Bread, one of two dominant bakery companies in the country, would build on Bimbo’s large U.S. acquisitions in recent years and strengthen the Mexican company’s position as the top bread maker in North America.

Bimbo has expanded its U.S. footprint in recent years, acquiring Sara Lee’s North American bakery business for $959 million in 2010 and buying Hostess Brands’ Beefsteak bread brand last year.

Discussions with Bimbo are continuing and there is no guarantee that the two sides will reach a deal, the sources cautioned. It’s possible other buyers will still step up, they added.

The sources asked not to be identified because details of the auction are confidential. Maple Leaf, Canada Bread, KKR and Grupo Bimbo declined to comment, while Bain did not respond to a request for comment.

Food processor Maple Leaf said in October it would look to sell its 90 per cent stake in Toronto-based Canada Bread. Royal Bank of Canada and Centerview Partners are working on the sale.

A maker of bread, rolls, bagels and sweet goods, Canada Bread competes with another large food producer, George Weston, in its home market.

Toronto-based Maple Leaf, one of Canada’s top food processors, has been selling parts of its businesses in an attempt to restructure under a multi-year plan. The company’s board came under fire a few years ago from activist investor West Face Capital, which criticized Maple Leaf’s corporate governance.

In August 2013, Maple Leaf sold its rendering business, Rothsay, to Darling International Inc for $645 million. Canada Bread also said late last year that it would sell its fresh pasta business, Olivieri, to Spain’s Ebro Foods SA for $120 million.

— Olivia Oran and Soyoung Kim report for Reuters from New York City.

Related stories:
Canada Bread agrees to sell pasta business to Spain’s Ebro, Oct. 24, 2013
Maple Leaf Foods explores sale of Canada Bread stake, Oct. 21, 2013
Maple Leaf to sell renderer Rothsay, Aug. 23, 2013

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The private equity firm is working on making a binding bid for MacDon by the mid-July deadline for final offers, the people said, asking not to be identified because the sale process is not public.

Other parties, including buyout firm Berkshire Partners LLC and an industry player, have also been evaluating potential bids for MacDon, although it remains uncertain whether a competing offer will materialize, some of the people added.

Representatives for MacDon, TPG and Berkshire Partners did not respond to requests for comment.

Reuters reported in April that MacDon has enlisted Goldman Sachs Group Inc to find a buyer. The company makes machinery used to harvest various agricultural products such as cereal grains, oilseeds, rice and soybeans.

It began in 1949 as Killbery Industries Ltd, a manufacturer of agricultural equipment, including sprayers, grain augers, disc seeders, cultivators and manure spreaders. It was renamed MacDon following the acquisition by the MacDonald family in 1971, according to its website.

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