Industrial Alliance boosts Clarington bid

Industrial Alliance Insurance and Financial Services has increased its bid price for Clarington to $15 per share, topping a bid of $14.75 per share from CI Financial.

“This is the best offer and the only firm and binding offer made to Clarington shareholders to this point,” stated Yvon Charest, president and CEO of Industrial Alliance.

Industrial Alliance will mail out a notice of variation to Clarington shareholders by December 6, having already sent out its offering circular dated November 18, which carried a bid of $14.25 per share.

A statement issued by CI says the firm is evaluating its position and has three weeks to reach a decision. In the past, CI has said its offer was superior for Clarington fundholders, as they would face lower management fees under the CI plan.

Industrial Alliance executive vice-president Normand Pépin says unitholder interest will be protected.

“We will give investors the option to retain their original investment, reinforced with our commitment to improve both expense ratios and the quality of investment management,” says Pépin. “In addition, we will allow them a range of options that include exchange privileges within 12 to 24 months into many other high quality funds which offer lower fees.”

Dominion Bond Rating Service says Industrial Alliance’s increased offer, which represents about an additional 5%, is expected to have only a modest impact on the firms’s leverage and solvency ratios. “With total capital of $1.7 billion, this transaction remains manageable for the company,” DBRS said.

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