CI Financial Income Fund has announced its intention to make an unsolicited offer to acquire all of the common shares of DundeeWealth Inc.
CI’s bid is equal to $20.25 per share, represents a premium of approximately $6.94, or 52% per common share, based on Monday’s closing price of DundeeWealth of $13.31.
That values the wealth management firm at nearly $2.4 billion.
This represents a 59% premium over the weighted average trading price of the common shares of DundeeWealth of $12.73 for the last 30 trading days ended today. The price of units of CI Financial was $27 as of the close of business Monday.
The consideration will be paid in CI Financial Units at an exchange ratio of 0.75 CI units for every DundeeWealth common share. It is expected that taxable Canadian shareholders will be able to elect to take advantage of a tax-free rollover to receive exchangeable securities of CI Financial.
CI Financial says it believes that a combination with DundeeWealth offers significant benefits, and that their combined strengths will unlock tremendous opportunities and significantly enhance value for the stakeholders of both entities.
“Our offer is 52% above today’s closing price for DundeeWealth and 59% above the recent offer for a minority stake by The Bank of Nova Scotia. Our offer fully reflects the exceptional businesses built by the Goodman family over the years at DundeeWealth,” said Bill Holland, CI Financial’s CEO.
On September 18, Scotiabank announced it had signed a definitive agreement to acquire 18% of DundeeWealth, with the right to acquire up to 20%. It will purchase 27.3 million newly issued common shares and non-voting shares at $12.76 apiece for a total price of $348 million.
Holland added, “We believe this transaction will be financially attractive to DundeeWealth shareholders and will enable them to participate in the future growth potential of CI Financial. In addition, we expect that DundeeWealth’s advisors, employees and customers will benefit from the combination of these two exceptional firms.”
CI Financial says it anticipates that the offer will proceed by way of take-over bid and expects to be in a position to mail its take-over bid in early October. The completion of the transaction will be subject to customary conditions, including acquiring not less than 66 2/3% of the outstanding DundeeWealth common shares on a fully diluted basis, obtaining all necessary regulatory approvals, confirmatory due diligence and that the sale of the DundeeWealth banking unit and private placement to Scotiabank not proceed.