Canaccord Genuity’s senior management team is progressing with its buyout of the Canadian financial services firm, announcing a formal offer to acquire all issued and outstanding shares.
The team, led by president and CEO Dan Daviau, holds just over 21% of the company’s outstanding share capital, and intends to buy the firm at C$11.25 (£6.90) per share.
The offer was publicly announced on 9 January, and it comes in at a 30.7% premium to the firm’s closing share price of C$8.61 (£5.28), on 6 January.
This would take the business private, making it employee owned.
However, a section of the Canadian Stock Exchange announcement was dedicated to arguing against what the company deemed to be an “unrealistic and flawed” valuation by RBC Dominion Securities, the investment and wealth management firm that Canaccord had instructed to undertake the formal valuation.
RBC valued the company’s shares higher than the buyout offer, judging them to be worth between C$12.75 (£7.81) and C$15.75 (£9.65). However, Cannacord’s senior management team has argued that the “unrealistic” figures are the result of a valuation process that was overly theoretical.
It added that RBC’s valuation could only be reached by selling the company off in its constituent parts, something that was not practicable given the co-reliance of the firm’s separate entities.
The largest external shareholder, who owns 10.7% of the share capital, is said to be in full support of the senior management team’s offer.
Daviau said: “We are pleased to be proceeding with our formal offer, which provides immediate certainty of value and liquidity for shareholders at a substantial premium in a volatile market. The offer has received strong support from the company’s largest independent shareholders, in addition to the most senior and tenured executives and employees of the company.”
The offer remains until 11:59pm on 13 June unless it is extended, accelerated, or withdrawn.