Readers are referred to the section "Forward-Looking Statements"
at the end of this release. All figures are expressed in Canadian
dollars.
MONTRÉAL, March 8, 2019 /CNW
Telbec/ - Power Corporation of Canada ("Power Corporation", the "Corporation"
or "PCC") (TSX: POW) today announced the terms of its previously
announced substantial issuer bid (the "PCC Offer") to repurchase
for cancellation up to $1.35 billion
of its subordinate voting shares (the "Shares"). The PCC Offer will
commence today and expire at 2:00 p.m.
(Eastern Time) on April 13,
2019, unless extended or withdrawn.
Great-West Lifeco ("Great-West") earlier today announced the
terms of its previously announced substantial issuer bid (the
"Great-West Offer") to return capital to shareholders while
maintaining significant excess capital to fund strategic
investments, including acquisitions, to drive growth and
profitability.
Power Financial Corporation ("Power Financial") has also
announced that it intends to support Great-West through its
participation in the Great-West Offer and expects to use the
proceeds from its participation in the Great-West Offer to fund the
Power Financial substantial issuer bid (the "PFC Offer"), the terms
of which were announced earlier today. The PFC Offer facilitates
the repurchase of Power Financial shares at currently attractive
valuations while maintaining a strong capital position to fund
future growth opportunities. Power Corporation intends to support
Power Financial through its participation in the PFC Offer.
Power Corporation, as previously disclosed, expects to use the
proceeds from its participation in the PFC Offer, along with the
Corporation's available resources, to fund the PCC Offer. The PCC
Offer facilitates the repurchase of PCC Shares at currently
attractive valuations while maintaining the financial resources to
pursue its strategy for long-term value creation across its
well-diversified portfolio of investments. Power Corporation's
ultimate controlling shareholder, the Desmarais Family Residuary
Trust (the "Trust"), has notified the Corporation that it does not
intend to participate in the PCC Offer.
The PCC
Offer
The PCC Offer is being made by way of a "modified Dutch
auction", which will allow shareholders who choose to participate
in the PCC Offer to individually select the price, within a price
range of not less than $28.50 per
Share and not more than $33.00 per
Share (in increments of $0.10 per
Share), at which they are willing to sell their Shares. Upon expiry
of the PCC Offer, the Corporation will determine the lowest
purchase price (which will not be more than $33.00 per Share and not less than $28.50 per Share) that will allow it to purchase
the maximum number of Shares properly tendered to the PCC Offer,
and not properly withdrawn, having an aggregate purchase price not
exceeding $1.35 billion.
The Corporation expects to fund the PCC Offer from the expected
receipt of proceeds from its participation in the PFC Offer and the
Corporation's available resources. In the event, and to the extent,
that such resources are insufficient to fund the PCC Offer, the
Corporation has also executed a commitment letter with a Canadian
chartered bank to provide for a non-revolving credit facility
to fund, in full, the payment for the Shares it has offered to
acquire under the PCC Offer.
Shareholders who wish to participate in the PCC Offer will be
able to do so through (i) auction tenders in which they will
specify the number of Shares being tendered at a specific price per
Share; (ii) purchase price tenders in which they will agree to have
a specified number of Shares purchased at the purchase price to be
determined pursuant to the auction and have their Shares considered
as having been tendered at the minimum price of $28.50 for the purposes of determining the
purchase price; or (iii) proportionate tenders in which
they will agree to sell, at the purchase price to be determined
pursuant to the auction, a number of Shares that will result
in them maintaining their proportionate Share ownership in the
Corporation following completion of the PCC Offer.
Shareholders who validly deposit Shares without specifying the
method in which they are tendering their Shares will be deemed to
have made a purchase price tender.
If, after taking into consideration the proportionate tenders,
Shares with an aggregate purchase price of more than $1.35 billion are properly tendered and not
properly withdrawn, the Corporation will purchase the Shares
on a pro rata basis after giving effect to proportionate tenders
and "odd lot" tenders (of shareholders beneficially owning fewer
than 100 Shares), which will not be subject to proration. All
Shares tendered at or below the finally determined purchase price
will be purchased, subject to proration, at the same purchase price
determined pursuant to the terms of the PCC Offer. Shares that are
not purchased, including Shares tendered pursuant to auction
tenders at prices above the purchase price, will be returned to
shareholders.
The Corporation's principal shareholder, the Desmarais Family
Residuary Trust, beneficially owns, as of March 5, 2019,
48,363,392 Shares and 48,697,962 of the Corporation's participating
preferred shares (which are not subject to the PCC Offer, but may
be converted into Shares), representing approximately 11.6% and
99.7%, respectively, of the issued and outstanding shares of such
classes and 20.8% and 59.1%, respectively, of the votes
associated with, and quantity of, the total outstanding shares of
the Corporation. The Trust has informed the Corporation that it
does not intend to participate in the PCC Offer.
Power Corporation's directors and officers have informed the
Corporation that they do not plan to tender any Shares pursuant to
the PCC Offer.
Additional Information
The PCC Offer will be for up to a maximum of 47,368,421 Shares
or approximately 11.35% of the total number of issued and
outstanding Shares on a non-diluted basis (based on full
participation and a purchase price equal to the minimum purchase
price per Share and 417,223,754 Shares issued and outstanding as of
March 5, 2019).
The PCC Offer is optional for all shareholders, who are free to
choose whether to participate, how many Shares to tender and, in
the case of auction tenders, at what price to tender within the
specified range. Any shareholders who do not deposit their Shares
(or whose Shares are not repurchased under the PCC Offer) will
realize a proportionate increase in their equity interest in the
Corporation, to the extent that Shares are purchased under the PCC
Offer.
The PCC Offer is not conditional upon any minimum number of
Shares being tendered but is subject to various other conditions
disclosed in the formal offer to purchase and issuer bid circular.
Power Corporation reserves the right, subject to applicable laws,
to withdraw or amend the PCC Offer, if certain events occur. The
PCC Offer is expected to remain open for acceptance until
2:00 p.m. (Eastern Time) on
April 13, 2019, unless extended or
withdrawn.
Details of the PCC Offer, including instructions for tendering
Shares, will be included in the formal offer to purchase and issuer
bid circular, letter of transmittal, notice of guaranteed delivery
and other related documents (the "Offer Documents"). The Offer
Documents are expected to be mailed to shareholders, filed with
applicable Canadian securities regulatory authorities and made
available without charge on SEDAR at www.sedar.com, and posted on
the Corporation's website at
www.PowerCorporation.com, today.
Power Corporation has engaged BMO Capital Markets to act as
financial advisor and dealer manager for the PCC Offer. Power
Corporation has also engaged Computershare Trust Company of
Canada to act as depositary for
the PCC Offer. Any questions or requests for information regarding
the PCC Offer may also be directed to the dealer manager or the
depositary.
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. The solicitation and the offer to buy Shares will only
be made pursuant to the Offer Documents filed with the Canadian
securities regulatory authorities. The PCC Offer will not be made
to, nor will tenders be accepted from or on behalf of, holders of
Shares in any jurisdiction in which the making or acceptance of
offers to sell Shares would not be in compliance with the laws of
that jurisdiction. None of Power Corporation, its Board of
Directors, the dealer manager or the depositary makes any
recommendation to shareholders as to whether to tender or refrain
from tendering any or all of their Shares pursuant to the PCC Offer
or the purchase price or prices at which shareholders may choose to
tender Shares. Shareholders are strongly urged to read the Offer
Documents carefully and to consult with their financial, tax and
legal advisors prior to making any decision with respect to the PCC
Offer.
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 Great-West, Power Financial
and the 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 terms of the PCC Offer, including the
maximum dollar value of the 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 any failure to consummate
the credit agreement prior to the expiration of the PCC Offer or
the unavailability of sufficient funds from the net proceeds of the
PFC Offer, the Corporation's other resources and/or the
Corporation's credit facility to fund the PCC Offer, and any
inability to obtain any required regulatory approvals or further
exemptive relief), the extent to which shareholders elect to tender
their 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 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