Readers are referred to the section "Forward-Looking Statements"
at the end of this release.
MONTRÉAL, March 4, 2019 /CNW
Telbec/ - Power Corporation of Canada ("Power Corporation", the "Corporation"
or "PCC") (TSX: POW) today announced its intention to conduct a
substantial issuer bid to repurchase for cancellation up to
$1.35 billion of its subordinate
voting shares (the "PCC Offer"). The PCC Offer will proceed by way
of a modified Dutch auction1.
Great-West Lifeco Inc. ("Great-West") (TSX: GWO), a subsidiary
of Power Financial Corporation ("Power Financial" or "PFC") (TSX:
PWF), itself a subsidiary of Power Corporation, announced today its
intention to conduct a substantial issuer bid (the "Great-West
Offer") to repurchase for cancellation up to $2 billion of its common shares. The Great-West
Offer follows Great-West's announcement on January 24, 2019 that it had agreed to sell its
U.S. individual life insurance and annuity business. The Great-West
Offer allows Great-West to repurchase shares at currently
attractive market valuations while maintaining the capital to fund
strategic investments to drive growth and profitability. Power
Financial intends to support Great-West through its participation
in the Great-West Offer by tendering a significant portion of its
Great-West shares on a proportionate basis1 and all
remaining tendered shares on a non-proportionate basis1.
Consequently, Power Financial expects its ownership in Great-West
will be marginally reduced.
Power Financial announced today its intention to conduct a
substantial issuer bid to repurchase for cancellation up to
$1.65 billion of its common shares
(the "PFC Offer"), allowing Power Financial to repurchase shares at
currently attractive market valuations. Power Corporation has
informed PFC that it intends to support Power Financial through its
participation in the PFC Offer by tendering a significant portion
of its Power Financial shares on a proportionate basis1
and all remaining tendered shares on a non-proportionate
basis1. Consequently, Power Corporation expects its
ownership in Power Financial will be marginally reduced.
Power Corporation's Board of Directors has authorized the
Corporation's intention to conduct a substantial issuer bid to
repurchase for cancellation up to $1.35
billion of its subordinate voting shares. "We believe that
the bid to repurchase the Corporation's shares in the current
market environment is an opportune use of our capital resources,"
said Paul Desmarais, Jr., Chairman
and Co-Chief Executive Officer. "The Corporation remains committed
to its well-diversified portfolio of investments and will continue
to have the financial resources required to pursue its strategy for
long-term value creation after completion of the PCC Offer," added
André Desmarais, Deputy Chairman, President and Co-Chief Executive
Officer. Power Corporation expects to fund the PCC Offer using the
expected receipt of proceeds from the Corporation's participation
in the PFC Offer and the Corporation's available resources. The
Desmarais Family Residuary Trust, the Corporation's ultimate
controlling shareholder, has informed Power Corporation that it
does not intend to participate in the PCC Offer, and, as a
consequence, is expected to increase its proportionate ownership in
the Corporation.
Power Corporation intends to announce the terms and commence the
PCC Offer shortly. Power Corporation has engaged BMO Capital
Markets as its financial advisor and dealer manager in connection
with the PCC Offer. The offer referred to in this news release has
not yet commenced. This news release is for informational purposes
only and does not constitute an offer to buy or the solicitation of
an offer to sell shares.
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The modified Dutch
auction will allow shareholders who choose to participate in the
PCC Offer to individually select the price, within a specified
range as determined by the Corporation, at which they are
willing to sell their subordinate voting shares. Shareholders who
wish to accept the PCC Offer may do so proportionately by
"Proportionate Tender" (such number of shares that will result in
maintaining their proportionate equity ownership in the Corporation
following completion of the PCC Offer) or non-proportionately by
"Auction Tender" (a specified number of shares at a specified
price) or "Purchase Price Tender" (a specified number of
shares at the purchase price determined pursuant to the PCC
Offer).
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About Power Corporation
Power Corporation of Canada is
a diversified international management and holding company with
interests in companies in the financial services, asset management,
sustainable and renewable energy, and other business sectors in
North America, Europe and Asia. To learn more, visit
www.PowerCorporation.com.
Forward-Looking Statements
Certain statements in this news release, other than statements
of historical fact, are forward-looking statements based on certain
assumptions and reflect the Corporation's current expectations, or
with respect to disclosure regarding Power Financial, Great-West
and The Desmarais Family Residuary Trust, reflect their disclosed
current expectations. Forward-looking statements are provided to
present information about management's current expectations and
plans relating to the future and the reader is cautioned that such
statements may not be appropriate for other purposes. These
statements include, without limitation, statements regarding the
strategies and outlook of the Corporation, as well as the
Corporation's intention to undertake a substantial issuer bid and
the terms thereof, including the maximum dollar value of
subordinate voting shares the Corporation may purchase under the
PCC Offer, the timing for launch and completion of the PCC Offer,
the sources and availability of funding for the PCC Offer, and the
effect of the financing of the PCC Offer on the
Corporation's future operations and financial condition.
By its nature, this information is subject to inherent risks and
uncertainties that may be general or specific and which give rise
to the possibility that expectations, forecasts, predictions,
projections or conclusions will not prove to be accurate, that
assumptions may not be correct and that objectives, strategic goals
and priorities will not be achieved. A variety of factors, many of
which are beyond the Corporation's and its subsidiaries' control,
affect the operations, performance and results of the Corporation
and its subsidiaries and their businesses, and could cause actual
results to differ materially from current expectations of estimated
or anticipated events or results. These factors include, but are
not limited to: the impact or unanticipated impact of general
economic, political and market factors in North America and internationally,
fluctuations in interest rates, inflation and foreign exchange
rates, monetary policies, business investment and the health of
local and global equity and capital markets, management of market
liquidity and funding risks, risks related to investments in
private companies and illiquid securities, risks associated with
financial instruments, changes in accounting policies and methods
used to report financial condition (including uncertainties
associated with significant judgments, estimates and assumptions),
the effect of applying future accounting changes, business
competition, operational and reputational risks, technological
changes, cybersecurity risks, changes in government regulation and
legislation, changes in tax laws, unexpected judicial or regulatory
proceedings, catastrophic events, the Corporation's and its
subsidiaries' ability to complete strategic transactions, integrate
acquisitions and implement other growth strategies, the PCC Offer
not occurring as expected, including failure of any condition to
the PCC Offer, the Corporation's inability to finance the PCC Offer
in the intended manner (including due to the unavailability of
sufficient funds from the net proceeds of the PFC Offer,
borrowings, available cash on hand and/or other capital resources
to fund the PCC Offer, any inability to obtain any required
regulatory approvals or exemptive relief), the extent to which
shareholders elect to tender their subordinate voting shares under
the PCC Offer, the Corporation having sufficient financial
resources and working capital following completion of the PCC
Offer, the market for the Corporation's subordinate voting shares
at the completion of the PCC Offer being materially less liquid
than the market that exists at the time the PCC Offer is commenced,
the PCC Offer launching and/or being completed on time, and the
Corporation's and its subsidiaries' success in anticipating and
managing the foregoing factors.
The reader is cautioned to consider these and other factors,
uncertainties and potential events carefully and not to put undue
reliance on forward-looking statements. Information contained in
forward-looking statements is based upon certain material
assumptions that were applied in drawing a conclusion or making a
forecast or projection, including management's perceptions of
historical trends, current conditions and expected future
developments, as well as other considerations that are believed to
be appropriate in the circumstances, including that the list of
factors in the previous paragraph, collectively, are not expected
to have a material impact on the Corporation and its subsidiaries.
While the Corporation considers these assumptions to be reasonable
based on information currently available to management, they may
prove to be incorrect.
Other than as specifically required by applicable Canadian law,
the Corporation undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after
the date on which such statement is made, or to reflect the
occurrence of unanticipated events, whether as a result of new
information, future events or results, or otherwise.
Additional information about the risks and uncertainties of the
Corporation's business and material factors or assumptions on which
information contained in forward-looking statements is based is
provided in its disclosure materials, including its most recent
Management's Discussion and Analysis and Annual Information Form,
filed with the securities regulatory authorities in Canada and available at www.sedar.com.
SOURCE Power Corporation of Canada