TORONTO, Aug. 5 /CNW/ - Saxon Financial Inc. (TSX: SFI) today announced that it has entered into a definitive agreement with IGM Financial Inc. pursuant to which IGM Financial will make an offer to acquire all the issued and outstanding shares of Saxon by way of a take-over bid. Under the terms of the offer, Saxon shareholders will be offered $21.00 per Saxon share in cash, valuing the proposed transaction at approximately $287 million. Saxon will become a part of Mackenzie Financial Corporation ("Mackenzie") once the take-over bid is completed.
"This is a great opportunity for Saxon shareholders to realize significant value from their investment," said Bob Tattersall, President and CEO. "We see Saxon's goal as being aligned with that of Mackenzie - the commitment to providing quality investment solutions to the marketplace. We look forward to working with the Mackenzie team."
The offer represents a premium of approximately 69% to the volume weighted average trading price of Saxon's common shares on the TSX for the 20 trading days ending August 1, 2008, and a premium of approximately 65% over Friday's closing price of $12.70.
IGM Financial has also entered into lock-up agreements with the Principal Shareholders of Saxon, CMA Holdings Incorporated, Bob Tattersall and Rick Howson, by which they have agreed to tender their shares representing approximately 45.4% of Saxon's outstanding common shares.
Mackenzie intends to offer Saxon funds as a sub-brand on Mackenzie's retail platform. Bob Tattersall and Rick Howson have agreed to continue with the combined organization and will actively lead the Howson Tattersall investment management team, which will continue to manage the Saxon funds. Messrs. Tattersall and Howson, the company's founders, will oversee their personal succession plans, announced in 2005, through December 31, 2010.
"This transaction will provide more resources to our investment, sales and servicing teams," said Mr. Howson. Charles R. Sims, President and Chief Executive Officer of Mackenzie Financial and Co-President and CEO of IGM Financial offered: "We believe that this acquisition enables us to enhance our offering to advisors and clients. Saxon has a proven capability in value-oriented equity and fixed income investing across the retail, institutional and high net worth client segments."
This offer is the outcome of a review of strategic alternatives conducted by a Special Committee of the Board of Directors of Saxon. Saxon's Board has approved the offer and has concluded that the transaction is fair to Saxon's shareholders and is in the best interests of Saxon and will recommend that Saxon's shareholders deposit their shares under the offer. BMO Capital Markets acted as exclusive financial advisor to Saxon and has provided the Board of Directors with an opinion that the consideration to be received is fair, from a financial point of view, to Saxon's shareholders, other than the Principal Shareholders.
The offer will be subject to certain customary conditions, including acceptance of the offer by holders of at least 66 2/3% of the outstanding common shares of Saxon, calculated on a fully diluted basis, and receipt of all regulatory approvals. Saxon has agreed to pay IGM a non-completion fee in the amount of $10.1 million in certain circumstances if the proposed transaction is not completed. The offer includes customary non-solicitation covenants and right to match provisions. Full details of the offer will be included in a formal take-over bid circular, which is expected to be mailed to Saxon's shareholders in mid-August. The transaction is anticipated to close on or before September 30, 2008, subject to required regulatory notifications and approvals.
Saxon is scheduled to release its complete second quarter financial results on August 7, 2008. Preliminary highlights include the following:
- total assets under management (AUM) increased by 1.1% in the second quarter to $13.4 billion as at June 30, 2008; - management fees increased by 4.2% from the prior quarter, primarily due to positive inflows under institutional mandates for CMA Holdings; and - earnings were impacted by incremental non-recurring human resource costs of $2.2 million, incurred earlier in the quarter.
About Saxon Financial Inc. (www.saxonfinancial.ca)
Saxon Financial Inc. is one of Canada's most respected value-style investment management firms. The Company has three principal lines of business: Saxon Funds Management Limited, which manages a family of high-performing mutual funds; Howson Tattersall Investment Counsel Limited, an institutional asset management business; and Howson Tattersall Private Asset Management Inc., a private client asset management business.
About IGM Financial
IGM Financial Inc. is one of Canada's premier personal financial services companies, and one of the country's largest managers and distributors of mutual funds and other managed asset products, with $116.8 billion in total assets under management. Its activities are carried out principally through Investors Group, Mackenzie Financial Corporation and Investment Planning Counsel. IGM Financial Inc. is a member of the Power Financial Corporation group of companies.