Genworth MI Canada to be acquired by Brookfield
Sagen , now operating as Sagen MI CanadaTM (the “Company”), announced that it has entered into a definitive arrangement agreement pursuant to which Brookfield Business Partners will purchase all of the outstanding common shares of the Company that are not already owned by Brookfield.
Under the terms of the Arrangement Agreement, Brookfield (which owns approximately 57% of the Common Shares) will purchase all of the Common Shares not held by it at a price of $43.50 per Common Share in cash pursuant to a court-approved plan of arrangement. The purchase price represents a premium of approximately 22% to the Company’s closing share price on the Toronto Stock Exchange on October 23, 2020, the last trading day prior to today’s announcement, and a premium of approximately 25% to the 20-day volume weighted average price on that date.
The Company’s board of directors, other than certain conflicted directors, unanimously approved the Arrangement Agreement following a unanimous recommendation of a special committee of independent directors. Both the Special Committee and the Board determined that the Transaction is in the best interests of the Company and unanimously recommend that shareholders vote in favour of the Transaction at the special meeting of shareholders to be held to approve the Transaction.
The Special Committee’s independent financial advisor, Scotia Capital, has provided an opinion to the Special Committee that, as of October 26, 2020, and subject to the assumptions, limitations and qualifications to be set out in a written formal valuation report, the fair market value of the Common Shares ranged between $43.00 and $48.00 per Common Share. Scotiabank has also provided an opinion to the Special Committee that, as of October 26, 2020, and subject to the assumptions, limitations and qualifications to be set out in a fairness opinion letter, the consideration to be received by the Company’s shareholders (other than Brookfield) is fair, from a financial point of view, to such shareholders.
“We have conducted, with the assistance of our independent financial and legal advisors, a thorough evaluation of Brookfield’s proposal and alternatives available to the Company to maximize shareholder value, while taking into consideration the interests of all of our stakeholders. We are pleased, after extensive negotiations, to have reached an agreement that provides shareholders of the Company other than Brookfield with a compelling purchase price and certain cash value.” – Chair of the Special Committee, Sidney Horn.
“The Transaction, together with our Company’s recent rebranding as Sagen MI CanadaTM, represents an exciting new chapter for the Company. We look forward under Brookfield’s ownership to continuing to work with lenders, regulators and mortgage professionals to help people responsibly achieve and maintain the dream of home ownership.” – President and CEO, Stuart Levings.
“We are pleased to have reached this agreement, which will provide existing shareholders of the Company with price certainty and a meaningful premium in an uncertain market environment.” – Managing Partner, Brookfield Business Partners, David Nowak.
The transaction is expected to close in the first half of 2021.
