Change will allow firm to acquire common shares as it attempts to mitigate effect of issuing securities
Approval has been granted by the Toronto Stock Exchange for Great-West Lifeco Inc. to make amendments to its existing NCIB – its Normal Course Issuer Bid.
As part of the planned amendment, the corporation, which became the country’s largest life insurer by market value during a surge on February 15, will be able to make purchases for as much as 20,000,000 in common shares – that’s around two per cent of its outstanding common shares as of December, 2015.
Coming into effect yesterday, February 23, 2016, the raised purchase limit, coupled with the NCIB amendments, will run until January 07, 2017. All daily purchases are set to be limited to just 139,185 common shares, which is 25 per cent of what was the average trading volume on a daily basis in the six months prior to December 31 last year. This is with the exception of block purchase exemptions. Meanwhile, common shares that were purchased pursuant for the NCIB amendment are set to be cancelled.
As for purchases, they can be carried out through TSX, as well as alternative trading systems in Canada. They may also be permitted in other means allowed by applicable laws or TSX, such as private agreements. Purchases relating to TSX and alternatives will be based on the existing market price at the time the purchase takes place; while private agreements usually include a discount at the market price prevailing at the time.
It is expected that the corporation will use the amendment to purchase common shares as it looks to mitigate any dilutive effect associated with issuing securities within its stock option plan, as well as for additional capital management.
