Senior management of Canaccord Genuity has launched a C$1.1bn bid to take the business private, as it believes the public markets place a low value on the business.
The offer, announced yesterday (9 January), is $11.25 per share, a 30.7% premium to the price of the common shares on 6 January.
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The offer group holds about 21.3% of the issued and outstanding common shares, held by the CEO, members of the global operating committee, senior and tenured employees from the firm.
Management of Canaccord Genuity has already gained support from the company's largest shareholder, which has 8.8% of the common shares. This, along with other shareholder agreements, means that 10.7% have entered into support agreements for the deal.
According to the public announcement, CEO of the firm Daniel Daviau met with the largest shareholder in June last year to discuss the company's prospects as part of a "routine dialogue". The shareholder had concerns about the public markets and offered support for a private transaction.
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"The geographically diverse business has proven to provide excellent advantages for the company's clients, but the common shares, which naturally reflect the inherent volatility of the global capital markets in which the company operates have proven to be not well-suited for trading in a public marketplace," said Daviau.
"After the completion of the proposed offer, as an employee-owned business, the company will be able to focus its efforts solely on advancing its proven strategies in ways that serve the best interests of its clients, while continuing to support a vibrant marketplace for issuers in need of capital, entrepreneurs bringing new companies and ideas to market and investors in our wealth management and capital markets businesses."
