Bank of Nova Scotia has entered into an agreement with a syndicate of underwriters to sell 72 million shares of CI Financial on a bought deal basis.
The bank will sell the shares for $31.60 each for gross proceeds of nearly $2.3 billion. CI’s stock closed at $33.65 on Wednesday.
Scotiabank has granted the underwriters an over-allotment option to purchase up to an additional 10.8 million shares at the offering price within 30 days from the date of the closing of the offering. The maximum proceeds raised will be more than $2.6 billion should this option be exercised in full.
The offering will not result in an increase in the number of outstanding common shares and CI will not receive any of the proceeds.
Scotiabank currently has a 37% stake in CI. Once the offering is complete, it will own about 11.4% of CI or 7.7% if the over-allotment option is exercised in full.
“Scotiabank is pleased with its investment in CI,” according to a statement from the bank. “The strong performance of CI’s business has allowed Scotiabank to monetize a portion of its holdings, while continuing to maintain a meaningful investment in CI. Scotiabank will continue to regularly assess its remaining investment in CI.”
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