by Adriano Marquez
Home Capital Group Inc said on Monday it would be bought by a subsidiary of Smith Financial Corp in a deal that values the company at 1.7 billion Canadian dollars ($1.27 billion).
The Canadian credit-products company said Smith Financial, controlled by Canadian financial services entrepreneur Stephen Smith, would offer C$44 for each share in the company it doesn’t already own.
Smith Financial currently owns 9.1% of Home Capital’s shares.
The price is a 63% premium to Friday’s closing price of 27.05c and a 72% premium to the volume weighted average trading price for the 20 days ending Friday.
Home Capital’s board said a review process found the transaction to be in the best interests of the company and to fairly compensate value shareholders.
The transaction will be implemented through a court-approved plan of arrangement and will require the approval of 66.6% of all votes cast by its shareholders at a special meeting.
Home Capital has the right to actively solicit and evaluate other offers thanks to the go-shop clause, but will have to pay a C$60 million termination fee if it pursues other options.
The transaction is expected to close in the middle of next year.
Write to Adriano Marchese at [email protected]
Credit: www.marketwatch.com /