Dundee Amends Bid for DC.PR.B; Now Bidding 19.50

Dundee Corporation has announced:

that it has received confirmation of support from a few of the largest investors that hold an aggregate of 590,700 Cumulative 5-Year Rate Reset First Preference Shares, Series 2 in the capital of the Corporation (the “Series 2 Shares”) who have agreed to tender all such Series 2 Shares to the Corporation’s previously announced substantial issuer bid (the “Offer”) at a price of $19.50 per Series 2 Share. As a result, the Corporation intends to mail and file a notice of variation in accordance with applicable Canadian securities laws on or before August 27, 2020 to amend the Offer to: (i) increase the price payable per Series 2 Share to a fixed price of $19.50 (the “Amended Purchase Price”); and (ii) increase the aggregate number of Series 2 Shares subject to the initial Offer from $44,000,000 in value to all of the issued and outstanding Series 2 Shares, representing approximately $61,000,000 in value based on the Amended Purchase Price. The Offer was initially made by way of a “modified Dutch auction”, which would have allowed holders who chose to participate in the initial Offer to individually select the price, within a price range of not less than C$16.00 and not more than C$18.50 per Series 2 Share, at which to tender.

In addition to the Amended Purchase Price, Shareholders who have Series 2 Shares taken up and paid for by the Corporation pursuant to the amended Offer will be entitled to receive a portion of the $0.33025 dividend declared by the Board of Directors on such Series 2 Shares for the quarter ended September 30, 2020. As an example, assuming the amended Offer expires on September 8, 2020 and the Series 2 Shares are taken up and paid for by the Corporation on September 10, 2020, the accrued dividend amount payable per Series 2 Share validly tendered, taken up and paid for under the amended Offer is estimated to be approximately C$0.26.

As a result of the variation in the terms of the Offer, the amended Offer will now expire at 5:00 p.m. (Toronto time) on September 8, 2020 or such later time and date to which the amended Offer may be extended by Dundee, unless varied or withdrawn by Dundee.

The Board of Directors of the Corporation will continue to review various options for the allocation of capital. Throughout 2019 and during 2020 to date, the Corporation has continued to implement its strategy of rationalizing its portfolio of investments and monetizing non-core assets as it exits business lines which are no longer deemed to be aligned with its longer-term strategy, while remaining committed to creating value for the Corporation and considering opportunities that might present themselves, including potential returns to shareholders of the Corporation. In line with the Corporation’s longer-term strategy and commitment to creating value for the Corporation, the Board believes that the purchase of Series 2 Shares under the amended Offer represents an attractive investment opportunity for Dundee and will be welcomed by certain holders of Series 2 Shares who may wish to reduce their share ownership positions.

“We believe that the amended purchase price gives greater certainty for a successful bid, which locks in long term value for our shareholders,” said Jonathan Goodman, Chairman and CEO.

As a result of the amendments to the terms of the Offer, if a shareholder has previously tendered Series 2 Shares, such tender is no longer valid, and the shareholder WILL BE REQUIRED TO PROPERLY RETENDER THEIR SERIES 2 SHARES to accept the amended Offer. For greater certainty, any and all Series 2 Shares previously tendered will be deemed to be withdrawn, and the shareholder must take additional steps if they wish to participate in the amended Offer.

I don’t know how the requirement to retender shares will interact with procedures at the various brokerages; those who have tendered are urged to contact their brokers and ensure that their shares are properly retendered.

The original Normal Course Issuer Bid (a Dutch Auction) was discussed on PrefBlog. Thanks to Assiduous Reader Dan Good for bringing this amendment to our attention.

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