Dundee disbands bid review committee

DundeeWealth is officially not for sale. The company has announced that it is no longer even considering offers since its “controlling shareholder” (read, the Goodman family) would not be selling its stake.

“We will move forward quickly building on our significant achievements in 2007, not least of which is a year-end net sales record that, exceeding $3 billion, leads all independent fund companies in Canada,” said president and CEO David Goodman.

The company had put together an independent committee to consider bids, which it said would be reconstituted “when and if it becomes necessary. The timing and likelihood of such an event is not possible to predict.”

Dundee Corporation immediately announced that it would be buying up to 5% of the outstanding common shares of DundeeWealth over the next 12 months.

The entire question of a takeover stemmed from DundeeWealth scrapping its Dundee Bank service and selling a stake in itself to Scotiabank. The move came as Dundee struggled to shore up its balance sheet, which had been hit hard by a $787 million exposure to suddenly illiquid asset-backed commercial paper.

The bidding war was informally kicked off by CI Financial in September, when it offered approximately $20.25 for each DundeeWealth share, a 52% premium on the September 24, 2007, closing price of $13.31.

By late November Dundee Corporation, the parent company of DundeeWealth, announced it was forming a committee to explore potential unsolicited bids. It was rumoured Scotia, CI, Power Corporation and Manulife Financial were all putting forward offers to purchase the company.

Some analysts estimated DundeeWealth and its subsidiaries, which include Dynamic Mutual Funds and more than 1,800 financial advisors, could be sold for as much as $25 per share.

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

(01/18/08)