Canaccord Genuity Executives Make Take Private Bid

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The leaders of Canada’s largest independent investment firm don’t want to be disturbed in public.

On Monday, executives at Canaccord Genuity invested about $843 million worth of money in a bet that it would get lucky in its growth-focused investment banking business, out of the prying eyes of a volatile public market. An open tender has been announced. In a turbulent global economy, it’s a reasonable expectation of privacy.

Private I (bank)

It’s no surprise that growth-focused companies struggle in times of rapid inflation and rising interest rates. With assets under management exceeding his $96 billion, Canaccord, which specializes in IPOs, is no exception. The company’s stock has fallen about 43% over the past 12 months as its net profit plunged about 50% year-over-year. Canaccord said in June that its largest shareholder had expressed concern that the company was undervalued in the public market and would support a private transaction. Now Canaccord’s top manager has heeded the call and is taking advantage of falling stock prices to make timely private bids, hoping to turn the crisis into an opportunity or at least mitigate it. .

CEO Daniel Daviau, chairman David Kassie and about a dozen senior executives who jointly own a 21% stake in Canaccord are seeking to remove the company from the Toronto Stock Exchange. To do so, they are willing to pay, but it is unclear if their offer will be enough to convince all interested parties.

  • The group’s bid, announced at C$11.25 per share, marks a more than 30% premium to Friday’s closing price and a more than 40% premium to the volume-weighted average over the past 20 days. , which is also a slight increase from Canaccord’s 2014. The IPO price is C$10.25.
  • However, an independent committee of three directors has not yet recommended the proposal to shareholders based on preliminary analysis from the Royal Bank of Canada, which the committee has hired as independent financial adviser.

Most: A bid group announced Monday that Canaccord’s largest outside shareholder (who did not disclose his name) backed the takeover offer, with New York-based HPS Investment Partners pledging more than $615 million in debt to complete the transaction. announced that it had agreed to provide funding. Who is the mysterious shareholder?Lo and behold, Canada’s top newspaper, The Globe and Mail, announced on Monday that HPS teeth Kanacord’s largest external shareholder. What can I say, investment bankers will think just like… investment bankers.

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