CI bids for DundeeWealth

CI Financial has announced it will make an unsolicited offer to acquire all outstanding common shares of DundeeWealth, and is willing to pay a hefty premium. The bid is $20.25 per share, a premium of 52% over Monday’s closing price of $13.31.

“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,” said William T. Holland, CI Financial’s CEO. “Our offer fully reflects the exceptional businesses built by the Goodman family over the years at DundeeWealth.”

The bid would be paid for in units of CI Financial Income Trust, which closed at $27.00. Shareholders who accept the bid would receive 0.75 units of CI for each share of DundeeWealth.

The bid is contingent on Dundee cancelling the sale of its banking unit to Scotiabank, as announced September 18.

“We have a tremendous regard for the money management skills, client service standards and entrepreneurial culture of DundeeWealth and its management and financial advisors that have led to the great success of the company,” Holland said. “We expect that DundeeWealth’s advisors, employees and customers will benefit from the combination of these two exceptional firms.”

The acquisition of DundeeWealth would make CI a serious rival for the banks and Investors Group. CI already owns Assante Wealth Management, with about 1,000 advisors managing $27 billion in assets for 300,000 clients nationwide. CI also owns Blackmont Capital, which includes another 180 advisors. DundeeWealth would add about 1,900 more advisors to the fold.

CI said in a press release that it expects to mail out its takeover bid in early October.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com