Readers are referred
to the section "Forward-Looking Statements" at the end of this
release. All figures are expressed in Canadian dollars.
|
MONTRÉAL, Feb. 13, 2020 /CNW
Telbec/ - Power Corporation of Canada ("Power Corporation" or "PCC") (TSX:
POW) and Power Financial Corporation ("Power Financial" or "PFC")
(TSX: PWF) today announced the successful completion of the
previously announced reorganization transaction (the
"Reorganization") pursuant to which, among other things, PCC
acquired all of the issued and outstanding common shares of PFC
("PFC Common Shares") held by holders of PFC Common Shares other
than PCC and its wholly owned subsidiaries (the "PFC Minority
Shareholders").
In accordance with the terms of the Reorganization, each PFC
Common Share held by PFC Minority Shareholders was exchanged for
1.05 subordinate voting shares of PCC ("PCC Subordinate Voting
Shares") and $0.01 in cash. PCC has
issued 250,628,173 PCC Subordinate Voting Shares under the
Reorganization and, based on the closing price of the PCC
Subordinate Voting Shares on the Toronto Stock Exchange (the "TSX")
on February 12, 2020 of $34.66,
the aggregate value of the consideration delivered to PFC Minority
Shareholders pursuant to the Reorganization is approximately
$8.7 billion.
With the completion of the Reorganization, it is anticipated
that the PFC Common Shares will be delisted from the TSX as soon as
practicable. As of February 12, 2020,
PCC beneficially owned 425,402,926 PFC Common Shares representing
approximately 64% of the issued and outstanding PFC Common Shares.
In connection with the Reorganization, PCC acquired 238,693,580 PFC
Common Shares such that PCC now beneficially owns 664,096,506 PFC
Common Shares, representing 100% of the issued and outstanding PFC
Common Shares.
PFC will remain a reporting issuer in all of the provinces and
territories of Canada as PFC's
first preferred shares will remain outstanding shares of PFC and
PFC's 6.9% debentures due March 11,
2033 will remain outstanding as obligations of PFC.
Following the Reorganization, PCC and PFC intend to redeem an
aggregate of $350 million of PCC's and PFC's first preferred
shares with available cash.
Management Changes
As previously announced, the Board of Directors of PCC has
appointed R. Jeffrey Orr, current
President and Chief Executive Officer of PFC, as President and
Chief Executive Officer of PCC effective immediately.
After 24 years as Co-Chief Executive Officers of PCC,
Paul Desmarais, Jr. and André
Desmarais are retiring from these roles. They will continue to play
an active role in the governance of PCC and maintain their
positions as Chairman and Deputy Chairman, respectively, of PCC's
Board of Directors. The Boards of Directors of PCC and PFC
wish to thank Messrs. Paul Desmarais,
Jr. and André Desmarais for their outstanding contributions
and years of dedicated service to Power Corporation and Power
Financial.
Final Pre-Emptive Right Offer Price
In accordance with the pre-emptive right (the "Pre-Emptive
Right") in favour of holders of participating preferred shares
("PCC Participating Preferred Shares") included in PCC's articles,
PCC provided a notice of offer (the "Offer") dated January 10, 2020 to the holders of the PCC
Participating Preferred Shares as at 5:00
p.m. (Eastern time) on December 27,
2019. The Offer provided for, among other things, the right
of such holders to acquire from PCC, on a pro rata basis, such
number of PCC Participating Preferred Shares that is equal to 12%
of the number of PCC Subordinate Voting Shares expected to be
issued in connection with the Reorganization for a consideration
per PCC Participating Preferred Share that is equal to the stated
capital amount per share for which any such PCC Subordinate Voting
Shares were issued. PCC has determined the final offer price for
the Offer (the "Offer Price") to be $34.27 per PCC Participating Preferred Share,
being equal to the quotient obtained when (i) $35.99, being the volume weighted average trading
price of the PFC Common Shares on the TSX for the five trading days
immediately preceding the date hereof, minus $0.01, is divided by (ii) 1.05.
A supplemental notice setting forth, among other things, the
determination of the Offer Price is expected to be mailed to
holders of PCC Participating Preferred Shares and filed with
applicable Canadian securities regulatory authorities. It will also
be made available on PCC's website at
www.powercorporation.com/en/investors/reorganization/ and on PCC's
SEDAR profile at www.sedar.com in the coming days. The notice
provides that the subsequent deadline for eligible holders of PCC
Participating Preferred Shares to participate in the Offer is
5:00 p.m. (Eastern time) on
March 12, 2020.
Pursuant to the Pre-Emptive Right, Power Corporation issued an
aggregate of 6,006,094 PCC Participating Preferred Shares on
February 12, 2020, the initial
closing date for the Offer. Pansolo Holding Inc., a corporation
controlled by the Desmarais Family Residuary Trust, purchased
6,000,000 PCC Participating Preferred Shares pursuant to its
partial exercise of the Pre-Emptive Right on February 12, 2020, resulting in direct and
indirect ownership by Pansolo of voting shares of PCC to which are
attached approximately 50.6% of the votes attached to all voting
shares of PCC pro forma the completion of the Reorganization.
About Power Corporation
Power Corporation is an international management and holding
company that focuses on financial services in North America, Europe and Asia. Its core holdings are leading insurance,
retirement, wealth management and investment businesses, including
a portfolio of alternative asset investment platforms. Power
Corporation's head office is located at 751 Victoria Square,
Montréal, Québec. To learn more, visit
www.PowerCorporation.com.
About Power Financial
Power Financial, a wholly owned subsidiary of Power Corporation
of Canada, is an international
management and holding company with interests in financial services
and asset management businesses in Canada, the United
States and Europe. It also
has significant holdings in a portfolio
of global companies based in Europe. Power
Financial's head office is located at 751 Victoria Square,
Montréal, Québec. To learn more, visit www.PowerFinancial.com.
This news release is for informational purposes only and does
not constitute an offer to buy or the solicitation of an offer to
sell any securities.
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 PCC's and PFC's 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 delisting of the PFC Common
Shares, PCC's and PFC's intention to redeem the first preferred
shares, the source of funds for such redemptions and the timing of
the mailing of the supplemental notice with respect to the
Offer.
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 PCC's and PFC's control, affect the operations,
performance and results of PCC and PFC and their respective
subsidiaries and business, 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, PCC's and its subsidiaries' ability to complete strategic
transactions, integrate acquisitions and implement other growth
strategies, the ability for PCC or PFC to redeem first preferred
shares and PCC's and PFC's 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, the timing of the delisting of the PFC Common Shares
and the mailing of the supplemental notice with respect to the
Offer, 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 PCC and PFC and their respective
subsidiaries. While PCC and PFC consider 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,
PCC and PFC undertake 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
PCC's and PFC's business and material factors or assumptions on
which information contained in forward-looking statements is based
is provided in its disclosure materials, including each of PCC's
and PFC's most recent Management's Discussion and Analysis and
Annual Information Form and PFC's management proxy circular dated
January 10, 2020, filed with the
securities regulatory authorities in Canada and available at www.sedar.com.
SOURCE Power Corporation of Canada