PrefBlog

Power Financial Corporation has announced:

that it has agreed to issue 8,000,000 Non-Cumulative First Preferred Shares, Series S (the “Series S Shares”) on a bought deal basis, for gross proceeds of $200 million. The Series S Shares will be priced at $25.00 per share and will carry an annual dividend yield of 4.80%. Closing is expected to occur on or about February 28, 2013. The issue will be underwritten by a syndicate of underwriters led by BMO Capital Markets, RBC Capital Markets and Scotiabank.

Power Financial has also granted the underwriters an option to purchase an additional 2,000,000 Series S Shares at the same offering price. Should the underwriters’ option be exercised fully, the total gross proceeds of the Series S Share offering will be $250 million.

Proceeds from the issue will be used to acquire subscription receipts of Great-West Lifeco Inc. (“Lifeco”) exchangeable into common shares of Lifeco as part of the $1.25 billion offering of subscription receipts announced by Lifeco earlier today in connection with its proposed acquisition of Irish Life Group Limited and to supplement Power Financial’s financial resources.

The Irish Life Group acquisition was announced earlier today by Great-West Lifeco, which is controlled by PWF.

Both PWF and its subsidiary IGM are buying stock in GWO which will fund the acquisition:

Power Financial Corporation’s (TSX: PWF) subsidiary, Great-West Lifeco Inc. (“Lifeco”), today announced that it has reached an agreement with the Government of Ireland to acquire all of the shares of Irish Life Group Limited for $1.75 billion (€1.3 billion). Established in 1939, Irish Life is the largest life and pensions group and investment manager in Ireland. The acquisition is transformational for the Lifeco companies in Ireland. Lifeco achieves, with a single transaction, the leading position in life insurance, pensions and investment management, which is consistent with Lifeco’s global business strategy of developing significant market positions in the sectors where the company participates.

Lifeco also announced a $1.25 billion offering of subscription receipts exchangeable into common shares by way of a $650 million public bought deal offering as well as concurrent private placements of subscription receipts for an amount of $600 million.

Power Financial has agreed to purchase $550 million of Lifeco subscription receipts. Power Financial’s subsidiary IGM Financial Inc. has also agreed to purchase $50 million of Lifeco subscription receipts. Each subscription receipt will entitle the holder to receive one common share of Lifeco upon closing of the acquisition of Irish Life, without any action on the part of the holder and without payment of additional consideration. Power Financial and IGM Financial will complete the purchase of subscription receipts by private placements concurrently with the closing of the bought deal public offering of Lifeco’s subscription receipts. The public offering and private placements of subscription receipts will be made at the same price of $25.70 per subscription receipt. The public offering is conditional on closing of the private placement financings and the private placement financings are conditional on closing of the public offering; both closings are expected to occur on March 12, 2013 and are subject to TSX approval.

Should each of the public offering and private placement financings be completed and the subscription receipts converted into common shares of Lifeco, Power Financial will hold, directly and indirectly, a 69.4% economic interest in Lifeco.

Power Financial Corporation is a diversified management and holding company that has interests, directly or indirectly, in companies in the financial services sector in Canada, the United States and Europe. It also has substantial holdings in a diversified industrial group based in Europe. Power Financial Corporation is a member of the Power Corporation group of companies.

Update: Supersize me!

Power Financial Corporation (TSX: PWF) announced today that, due to strong demand, the Corporation has increased the size of its previously announced bought deal public offering to 12,000,000 Non-Cumulative First Preferred Shares, Series S (the “Series S Shares”), for gross proceeds of $300 million. The Series S Shares will be priced at $25.00 per share and will carry an annual dividend yield of 4.80%. Closing is expected to occur on or about February 28, 2013. The issue will be underwritten by a syndicate of underwriters led by BMO Capital Markets, RBC Capital Markets and Scotiabank.

This entry was posted on Tuesday, February 19th, 2013 at 3:23 pm and is filed under New Issues. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.