ECN Capital Corp. has announced:
that it has entered into a definitive arrangement agreement dated November 13, 2025 (the “Arrangement Agreement”) to be acquired by a newly formed acquisition vehicle (the “Purchaser”), controlled by an investor group led by Warburg Pincus LLC (the “Purchaser Group”), pursuant to which the Purchaser will acquire (i) all of the issued and outstanding common shares of the Company (the “Common Shares”) for C$3.10 per Common Share, in cash, (ii) all of the issued and outstanding cumulative 5-year minimum rate reset preferred shares, Series C of the Company (the “Series C Shares”) for C$26.00 per share, in cash (plus all accrued but unpaid dividends thereon); and (iii) all of the issued and outstanding mandatory convertible preferred shares, Series E of the Company (the “Series E Shares”), of which Champion Homes, Inc. (“Champion Homes”) is the sole owner, for C$3.10 per share, in cash (plus all accrued but unpaid dividends thereon) (the “Transaction”).
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The price per Series C Share represents a premium of approximately 11% to the closing price on the TSX of the Series C Shares on November 12, 2025 and a premium of approximately 11% to the 10-day volume weighted average trading price per Series C Share as of that date, in addition to the payment of accrued and unpaid dividends.
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The Transaction will be implemented by way of a statutory plan of arrangement under the Business Corporations Act (Ontario). Implementation of the Transaction will be subject to, among other things, the receipt of the shareholder approvals described below, court approval and customary closing conditions, including the receipt of certain key regulatory approvals. The Transaction is not subject to any financing condition.The Transaction is subject to the approval by (i) at least 66 2/3% of the votes cast by the Common Shareholders and Series E Shareholders present or represented by proxy at the Meeting, voting together as a single class; and (ii) if required, a simple majority of the votes cast by the Common Shareholders present or represented by proxy at the Meeting (excluding the Common Shares owned and/or controlled, by any shareholders required to be excluded under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”)). The acquisition of the Series C Shares is conditional upon (i) the approval of at least 66 2/3% of the votes cast by the Series C Shareholders present or represented by proxy at the Meeting and (ii) if required, a simple majority of the votes cast by the Series C Shareholders present or represented by Proxy at the Meeting (excluding votes of any Series C Shareholders required to be excluded under MI 61-101). Completion of the Arrangement is not conditional upon obtaining approval from the Series C Shareholders and if the requisite approvals are not obtained, the Series C Shares will remain outstanding following closing of the Transaction in accordance with their terms.
ECN.PR.C was issued as a FixedReset, 6.25%+519M625, that commenced trading 2017-5-25 after being announced 2017-5-15. It reset to 7.937% in 2022. It is tracked by HIMIPref™ but relegated to the Scraps subindex on credit concerns.
Thanks to Assiduous Reader John19 for bringing this to my attention!
Cheers to fellow ECN.PR.C holders!
Yesterday ECN reported a privatization offer … which is good … and which included an offer to pay ECN.PR.C pref holders a $26 early redemption price. The offer will be subjected to a vote of all holders next January.
So … the new guys are offering us $26 to agree to “redeem” our prefs early … cuz they don’t want to wait until the 30 June 2027 reset/redemption date and have to file regulatory documents until then … AND … they really don’t want to pay the additional (almost) 50 cents per share per quarter until then. So it makes sense for them … offer us a buck extra (yaaay!) for an early redemption … giving us a guaranteed liquidity event … while saving them (costing us) $2.50 of dividends over the “surrendered” five quarters (assuming they would settle by the end of the first quarter of 2026).
So I plan to vote NO! on their offer … having loaded up all our family accounts (RESPs, Margins, TFSAs) with ECN.PR.C in past years (with an across-account ACB ca. $20) … and I did the math … our family accounts contain 0.6% of the still outstanding prefs. Given the 625 b.p. spread of this pref issue … the new buyers will be just as keen to redeem on 30 June 2027 as they are now … well … okay … not quite as keen … lol! … but still keen enough to guarantee us a $25 redemption on that date.
Think carefully and vote NO … and … given that only 33.5% of holders need to vote against … we can do this!
P.S. And be aware that by voting NO on the pref early redemption, you will not jeopardize the privatization process … cuz the Common share vote and the Preferred share vote are two separate events … and their documentation states clearly that if the Common holders vote yes while the Preferred holders vote no … the transaction will proceed … the Common shares will be delisted from the TSX … but the Preferred shares will continue to trade and be listed on the TSX.
CanSiamCyp, I don’t hold ECN.PR.C but I don’t really understand the desire to vote against this proposal and instead hold this. If one assumes that it will be redeemed at $25 in June 2027 and using the $26 offer price, what do you see as the yield to that redemption date? Depending on your assumptions as to when this early redemption occurs, I see something around 5%. To me, it seems like a fair offer. Take the money and invest elsewhere.
Niagara:
As James wrote correctly in the original post:
It reset to 7.937% in 2022.
So at par value of $25, this pref will yield 7.937% for 5 quarters beyond the proposed redemption in Q1 of 2026 … and … given their desire to redeem early, and the reset spread of 6.25% for this issue, it is a given that they will redeem 30 June 2027 in their worst case scenario (meaning the vote fails).
So a guaranteed payout of $25 mid 2027 and a dividend yield of 7.937% until that point … what’s not to like? And what alternatives could yield a (virtually) guaranteed 7.937% with no risk of capital loss?
First, I’ll note that Closing Date is not well-defined. From the press release:
So to be thorough, investors should try fiddling with different Closing Dates to ensure that whatever answer they get from analysis is reasonably robust.
a guaranteed payout of $25 mid 2027 and a dividend yield of 7.937% until that point
Well, not really. Niagara is suggesting that the choice be evaluated by modelling two pseudo-instruments:
So assume you hold #1. Would you use your redemption money on the Closing Date to buy #2? There are two considerations here that are important:
Since the dividends won’t change between now and the Redemption Date, you can use the old YTC calculator for Straight Perpetuals to calculate the yield of #2 (and, if you like, the yields of #1 and of a third analytical option of #1 + #2) and see what you like best.
If you want to be all fancy-pants about it, you can use the yield calculator for FixedResets, but if analyzed as described it’s not necessary.
And, I should note, all the above assumes that the acquisition (of the common) is successful, implying that credit quality will almost certainly improve well beyond the current junk level of the stand-alone company which DBRS says is Pfd-4(high). Whether that assumption is true or not is another complication!