Scotiabank Completes Acquisition of DundeeWealth for $2.3 Billion 

 

February 1, 2011

On February 1, 2011, Scotiabank announced the successful completion of its acquisition of DundeeWealth Inc. As a result of this acquisition, Scotiabank becomes the fifth largest mutual fund provider in Canada and the third largest among the country's leading banks based on figures reported by the Investment Funds Institute of Canada. Prior to the transaction, Scotiabank owned approximately 18% of DundeeWealth. The transaction was effected by way of a take-over bid for all the outstanding shares of DundeeWealth.

On the day that the announcement was made, the value of the transaction to DundeeWealth shareholders was $2.3 billion, representing an enterprise value for DundeeWealth of approximately $3.2 billion. For each DundeeWealth common share, Scotiabank offered 0.2497 of a Scotiabank common share and, at the election of the shareholder, either $5.00 in cash or 0.2 of a $25.00 principal amount 3.70% five year rate reset Scotiabank preferred share. DundeeWealth shareholders also received a special distribution of $2.00 per share in cash as well as an interest in Dundee Capital Markets Inc., which DundeeWealth distributed to its shareholders in connection with the transaction.

Dundee Corporation, which owned approximately 48% of DundeeWealth, Ned Goodman, controlling shareholder of Dundee Corporation, and David Goodman, DundeeWealth President and CEO, entered into irrevocable lock-up agreements with Scotiabank. The transaction was also supported by DundeeWealth, which established a special committee of independent directors to review the transaction.

DundeeWealth's Special committee of independent directors was represented by a team from McMillan LLP that included Sean Farrell and Stewart Ash (corporate).