BAM Renews Real NCIB

Brookfield Asset Management Inc. has announced:

it has received approval from the Toronto Stock Exchange (“TSX”) for its proposed normal course issuer bid to purchase up to 10% of the public float of each series of the company’s outstanding Class A Preference Shares that are listed on the TSX (the “Preferred Shares”). Purchases under the bid will be made through the facilities of the TSX and/or alternative Canadian trading systems. The period of the normal course issuer bid will extend from August 20, 2019 to August 19, 2020, or an earlier date should Brookfield complete its purchases. Brookfield will pay the market price at the time of acquisition for any Preferred Shares purchased. All Preferred Shares acquired by Brookfield under this bid will be cancelled.

Under the normal course issuer bid, Brookfield is authorized to repurchase each respective series of the Preferred Shares as follows:

Series Ticker Issued and outstanding shares1 Public float1 Average daily trading volume2 Maximum number of shares subject to Purchase
Total Daily
Series 2 BAM.PR.B 10,457,685 10,220,175 6,171 1,022,017 1,542
Series 4 BAM.PR.C 3,995,910 3,983,910 3,339 398,391 1,000
Series 8 BAM.PR.E 2,476,185 2,475,185 928 247,518 1,000
Series 9 BAM.PR.G 5,515,981 2,022,881 691 202,288 1,000
Series 13 BAM.PR.K 9,640,096 8,792,596 12,049 879,259 3,012
Series 17 BAM.PR.M 7,840,204 7,840,204 2,913 784,020 1,000
Series 18 BAM.PR.N 7,866,749 7,681,088 3,555 768,108 1,000
Series 24 BAM.PR.R 9,282,910 9,281,610 6,314 928,161 1,578
Series 25 BAM.PR.S 1,529,133 1,529,133 976 152,913 1,000
Series 26 BAM.PR.T 9,774,812 9,774,012 7,764 977,401 1,941
Series 28 BAM.PR.X 9,241,457 9,237,347 10,008 923,734 2,502
Series 30 BAM.PR.Z 9,790,374 9,790,274 9,037 979,027 2,259
Series 32 BAM.PF.A 11,754,099 11,754,099 11,858 1,175,409 2,964
Series 34 BAM.PF.B 9,879,277 9,879,277 8,901 987,927 2,225
Series 36 BAM.PF.C 7,842,909 7,842,909 4,384 784,290 1,096
Series 37 BAM.PF.D 7,830,091 7,830,091 3,488 783,009 1,000
Series 38 BAM.PF.E 7,914,556 7,908,396 5,742 790,839 1,435
Series 40 BAM.PF.F 11,848,165 11,845,195 10,856 1,184,519 2,714
Series 42 BAM.PF.G 11,899,900 11,890,300 7,938 1,189,030 1,984
Series 44 BAM.PF.H 9,831,929 9,831,929 8,357 983,192 2,089
Series 46 BAM.PF.I 11,740,797 11,740,797 15,201 1,174,079 3,800
Series 48 BAM.PF.J 11,885,972 11,885,972 9,161 1,188,597 2,290

1. Calculated as at August 6, 2019.
2. Calculated for the six months prior to July 31, 2019.
3. In accordance with TSX rules, any daily repurchases with respect to: (i) the Series 4, Series 8, Series 9, Series 17, Series 18, Series 25 and Series 36 Preferred Shares will be limited to 1,000 shares of the respective series and (ii) each of the other series of Preferred Shares (excluding the Series 4, Series 8, Series 9, Series 17, Series 25 and Series 36 Preferred Shares) will be limited to 25% of the average daily trading volume on the TSX of the respective series.

As of August 6, 2019, under its current normal course issuer bid that commenced on August 20, 2018 and will expire on August 19, 2019, and which the company sought and received approval from the TSX, Brookfield purchased Preferred Shares as follows

Series Number of shares purchased Maximum number of shares subject to purchase Weighted average price paid per purchased share (C$)
Series 2 7,415 1,022,759 13.79
Series 4 4,090 398,800 13.68
Series 8 3,400 247,858 19.54
Series 9 3,134 202,601 18.92
Series 13 7,604 880,020 13.85
Series 17 110,552 795,075 20.45
Series 18 99,409 778,049 20.42
Series 24 112,640 939,425 18.38
Series 25 4,000 153,313 16.96
Series 26 129,336 990,334 18.30
Series 28 122,040 935,938 16.69
Series 30 143,776 993,405 22.68
Series 32 228,469 1,198,256 23.02
Series 34 98,612 997,788 21.09
Series 36 106,115 794,902 20.90
Series 37 118,992 794,908 21.21
Series 38 91,604 800,000 20.40
Series 40 154,805 1,200,000 21.80
Series 42 109,700 1,200,000 21.50
Series 44 113,260 994,518 25.71
Series 46 154,993 1,189,579 25.44
Series 48 114,028 1,200,000 24.44

Brookfield is renewing its normal course issuer bid because it believes that, from time to time, the Preferred Shares may trade in price ranges that do not fully reflect their value. Brookfield believes that, in such circumstances, acquiring the Preferred Shares represents an attractive and desirable use of its available funds.

Brookfield will enter into an automatic purchase plan on or about the week of September 23, 2019 in relation to the normal course issuer bid. The automatic purchase plan will allow for the purchase of Preferred Shares, subject to certain trading parameters, at times when Brookfield ordinarily would not be active in the market due to its own internal trading black-out period, insider trading rules or otherwise. Outside of these periods, Preferred Shares will be repurchased in accordance with management’s discretion and in compliance with applicable law.

Brookfield Asset Management Inc. is a leading global alternative asset manager with over $385 billion in assets under management. The company has more than a 120-year history of owning and operating assets with a focus on real estate, renewable power, infrastructure and private equity. Brookfield offers a range of public and private investment products and services, and is co-listed on the New York, Toronto and Euronext stock exchanges under the symbol BAM, BAM.A and BAMA, respectively.

For more information, please visit our website at www.brookfield.com or contact:

Claire Holland
Communications & Media
Tel: (416) 369-8236
Email: claire.holland@brookfield.com

Linda Northwood
Investor Relations
Tel: (416) 359-8647
Email: linda.northwood@brookfield.com

This is significant because Brookfield spent just under $44-million over the year. So, OK, $44-million isn’t going to turn the market around. Its effect can be cancelled simply by the exercise of a greenshoe option on a normal-sized new issue. But monny a mickle maks a muckle, as we say in Glasgow, or would say if we ever went there, and since the average price paid per share is a hair under $21.50, that’s a profit on cancellation of $3.50 per share, or a total of a little over $7-million, which is always a nice thing to have.

I note that last year’s NCIB release stated:

Under its current normal course issuer bid that commenced on August 18, 2017 and expired on August 17, 2018, under which Company sought and received approval from the TSX, Brookfield purchased 34,986 Series 28 Preferred Shares, 2,587 Series 30 Preferred Shares, 30,625 Series 44 Preferred Shares and 104,210 Series 46 Preferred Shares at weighted average prices of C$17.59, C$24.50, C$26.31 and C$26.14 per Preferred Share, respectively. No other Preferred Shares were purchased by Brookfield under the normal course issuer bid.

I mentioned their 2015-2016 NCIB on August 12, 2015 – the final effects of that were much smaller:

Under its current normal course issuer bid that commenced on August 12, 2015 and expired on August 11, 2016, Brookfield purchased 1,000 Series 9 Preferred Shares, 72,617 Series 24 Preferred Shares, 96,652 Series 26 Preferred Shares, 5,627 Series 28 Preferred Shares, 49,548 Series 30 Preferred Shares, 17,432 Series 32 Preferred Shares and 22,111 Series 34 Preferred Shares at weighted average prices of C$15.19, C$15.22, C$15.27, C$14.19, C$18.86, C$18.63 and C$17.77 per Preferred Share, respectively. No other Preferred Shares were purchased by Brookfield under the normal course issuer bid.

I like to see these buy-backs – they show that the company is not worried about being able to find cheaper financing elsewhere and also shows that the Treasury department is watching for opportunities. It’s always nice to see that somebody’s really thinking about what they’re doing – it’s sometimes a little dubious.

Thanks to Assiduous Reader mbarbon for bringing this to my attention.

2 Responses to “BAM Renews Real NCIB”

  1. stusclues says:

    “But monny a mickle maks a muckle, as we say in Glasgow, or would say if we ever went there”

    I humbly suggest that with the blow-out spreads we are experiencing, new issuance should slow to a trickle and NCIB/SIB announcements ought to explode … if the treasury departments of other issuers are “really thinking about what they’re doing”. In aggregate, this ought to help narrow spreads again … eventually.

  2. mbarbon says:

    I would love to see these being bought out at a premium ($25 would be a dream).

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