WFG pref-holder rejects Desjardins terms

The Desjardins Financial takeover of Western Financial Group has hit a small snag, with one long-term fixed income holder recommending that others not sell their preferred shares.

Crystalline Management Inc., portfolio manager of the Amethyst Arbitrage Fund, says it agrees that the offer made for common shares is fair, but suggests there are better alternatives for holders of WFG preferred shares.

“We appreciate the liquidity event offered by the acquirer. However, given the credit strength of the company once the acquisition completed, we believe it is in the interests of WFG fixed income securities holders not to tender the series 3 and 4 preferred or convert their series 2 and 5 preferred and convertible bonds,” Crystalline said in a press release.

“We also wish to point out that in the opinion of our counsel, the intentions of DFC as expressed in its take-over bid circular, would result in the series 2 and 5 preferred shares converting, according to their respective terms, into cash at the takeover price, thereby allowing continuous liquidity post take-over.”

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.