Regulatory issues have caused a delay in the deal proceeding which is not expected to be resolved before the offer expires on June 13
The board of Canaccord Genuity Group has recommended that shareholders reject the management-led buyout bid for the firm.
In February, a formal offer was made by a group including officers and employees of the firm to take it private, but it has not been plain sailing with a rebel shareholder sparking a boardroom battle.
Four directors who served on the company’s Special Committee and refused to back a management buyout offer for the firm resigned - and a new director was appointed to evaluate the takeover bid.
A month ago, an update was issued which stated that due to “an ongoing regulatory matter involving one of the Company’s foreign subsidiaries, regulatory approval for the change in control contemplated by the Management Offer will not be granted on an expedited basis.”
It was not expected that the offer would be completed by the June 13 expiry date.
The board issued a further statement this week stating:
“…the Board of Directors of Canaccord Genuity (the “Board”) is recommending that shareholders of the Company (the “Shareholders”) reject the Offer and not tender their Common Shares to the Offer as the conditions of the Offer are not expected to be satisfied at or prior to the expiry of the Offer on June 13, 2023. The recommendation follows consultation with the Company’s special committee of independent directors, with the benefit of advice from the Company’s legal counsel.
Due to the continued issue of the regulatory matter, the board added that “absent an extension of the Offer to permit such regulatory condition to be satisfied, the Board cannot recommend acceptance of the Offer and accordingly must recommend rejection of the Offer.”
Canaccord has been expanding its wealth management business this year with the acquisition of Mercer’s Canadian Private Wealth business with three advisory teams joining the firm last month.
