No buyers left for DundeeWealth?

If its stock price is any indication, it appears the much hyped auction of DundeeWealth is already over, with no bidders willing to pay what it would cost to buy the company.

The Globe and Mail reported late yesterday that discussions between DundeeWealth and its last interested suitor, the Bank of Nova Scotia, amicably ended over issues of price.

No other sources have confirmed The Globe and Mail account, but the news has certainly been priced in by the market. Investors started dumping DundeeWealth stock on Tuesday afternoon, decreasing its value by almost 10%. By Wednesday morning it was trading as low as $16.46 on the Toronto Stock Exchange. This is a sharp drop from the beginning of the month, when its stock price was more than $22 on speculation that a takeover was close at hand.

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.

It was a premium it seems few suitors were interested in paying. By the end of last week, rumours suggested Scotia was the only company still in the bidding process. Scotia was automatically in a front-runner position since it had already purchased 18% of DundeeWealth back in September, and has the right to match any takeover offer.

It appears now that Scotia too was ultimately unable come to terms with a sale price that is agreeable to Ned Goodman, the company’s controlling shareholder.

There also still remains the question whether the company was ever even for sale. Through the entire course of the takeover speculation, Goodman has made it clear he does not wish to sell DundeeWealth.

Filed by Mark Noble, Advisor.ca, mark.noble@advisor.rogers.com