The management takeover of Canaccord Genuity (TSX: CF) appears to now be off the table, following the expiration of the offer to acquire all of outstanding shares of the company.
The management group had previously offered to buyout the company at a price of $11.25 per share, or C$1.1 billion, with the offer lead by CEO Dan Daviau and Chairman David Kassie. The firms board of directors had railed against the offer as being too low based on a Royal Bank of Canada analysis that valued the company higher than what was offered.
The transaction hit regulatory hurdles last month however when it was revealed that an “ongoing regulatory matter” might prevent the fast approval necessary for the transaction to close on time, ahead of the now-lapsed deadline.
READ: Canaccord Shares Crash As Investigation Casts Doubts Over Buyout Plans
The offer to acquire such shares had an expiration date of midnight on June 13, which included necessary regulatory approvals to proceed with the transaction, which were not obtained. The management team conducting the buyout has elected to not extend the offer, and has instead entered into a standstill arrangement with the company.
The standstill is for a period of two years, and includes certain voting support commitments in favour of board-supported director nominees, the reimbursement of reasonable expenses of the management group, and the continuation of an independent committee that will consider “potential value enhancing alternative transactions.”
It has also been revealed that lock-up arrangements held by those involved in the proposed management buyout have been terminated, which frees up 10.7% of the issued and outstanding common shares of the issuer. A related co-bidding arrangement that involved 21.2% of the firms outstanding shares were also terminated.
Canaccord Genuity last traded at $8.55 on the TSX.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
