Family Office
CI challenge to Scotiabank for DundeeWealth rebuffed
Companies squabble over Cdn fund, brokerage and advisor-support firm. Canadian fund firm DundeeWealth lost no time spurning a $2.4-billion unsolicited bid from Toronto-based CI Financial and underlining its preference for the Bank of Nova Scotia's $348-million offer for a much smaller stake.
"The arrangement with Scotiabank was an 18% arrangement [our board is] comfortable with," says DundeeWealth's president and CEO David Goodman.
Suitors
Scotiabank -- as the Bank of Nova Scotia sometimes calls itself -- says its attempt to buy into Toronto-based Dundee is a strategic investment in wealth management.
"We will be expanding our wealth-management earnings and we'll have a partner that is well-regarded in the asset and investment-management field," says Rick Waugh, CEO of Toronto-based Scotiabank. He adds that the offer to DundeeWealth "reflects our confidence in [its] proven asset-management expertise and deep experience with its independent advisor channel, and in the long-term potential of this investment."
The proposed transaction also calls for Scotiabank to take over DundeeWealth's bank and provide "white label" banking services to support products in Dundee's independent-advisor channel.
Goodman sees Scotiabank's investment "as a demonstration of confidence in our wealth management expertise and operations, which will benefit all stakeholders."
CI owns several Canadian financial-service firms including CI Investments, Blackmont Capital and Assante Wealth Management. Its CEO Bill Holland says he's been eyeing DundeeWealth for the better part of a decade. "In a lot of ways, they're like a smaller version of CI," he says.
But even before DundeeWealth's board rejected CI's offer, Goodman and his father, DundeeWealth's founder Ned Goodman, had said they didn't want to sell DundeeWealth outright.
DundeeWealth manages the Dynamic mutual-fund family and provides investment, brokerage and advisory services. It has about $62.4 billion in assets under management and administration. -FWR
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