Shareholders Need Not Take Any Action At This Time

TORONTO, Jan. 9, 2023 /CNW/ - Canaccord Genuity Group Inc. (TSX: CF) (the "Company") today acknowledged that a group comprised of certain members of the Company's management team (the "Management Group") has announced an intention to make a take-over bid for all of the common shares of the Company not already owned by the Management Group at a price of $11.25 per share (the "Proposed Offer").

The Management Group is led by Dan Daviau, the President and Chief Executive Officer of the Company, and David Kassie, the Chairman of the Board of Directors of the Company. In its press release, the Management Group disclosed that its members collectively exercise control or direction over approximately 21.3% of the outstanding common shares of the Company.

The Board of Directors of the Company formed a Special Committee of independent directors to evaluate and consider an earlier non-binding proposal by the Management Group. The Special Committee of independent directors is comprised of Gillian H. Denham (Chair of the Special Committee), Charles N. Bralver, Dipesh J. Shah and Sally J. Tennant. The Special Committee has retained Davies Ward Phillips & Vineberg LLP, as its independent legal counsel, and has engaged RBC Dominion Securities Inc., a member company of RBC Capital Markets ("RBC") as its independent financial advisor to provide financial advice and a formal valuation of the Company's common shares as required under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101").

The Special Committee intends to fully respond to the Proposed Offer in due course. The Proposed Offer will not formally commence until the Management Group files and mails its take-over bid circular, and must remain open for acceptance for a minimum of 105 days. The Special Committee will provide its formal recommendation to shareholders within 15 days of the mailing of the Management Group's take-over bid circular. In the meantime, shareholders need not take any action.

The Special Committee wishes to advise shareholders of certain matters following a preliminary review of the Management Group's press release and the Proposed Offer:

  • The Special Committee and the Management Group engaged in prior discussions concerning a proposal from the Management Group regarding a potential Board-supported transaction to be executed by way of a plan of arrangement. The Special Committee advised the Management Group that it was not prepared to support an offer of $11.25 per common share based on the preliminary financial analyses conducted by RBC. To date, engagement between the Special Committee and the Management Group has not resulted in an agreement on a value per common share that the Special Committee could support and recommend to shareholders. Further detail concerning the prior discussion between the Special Committee and the Management Group will be contained in the Company's directors' circular to be issued following the mailing of the Management Group's take-over bid circular.

  • Importantly, the Special Committee has not agreed to recommend that shareholders accept the Proposed Offer. The Special Committee is awaiting the formal valuation to be prepared by RBC, as required under MI 61-101, following which the Special Committee will provide a formal recommendation to shareholders with respect to the Proposed Offer.

  • The Special Committee notes that the Management Group has engaged Raymond James Ltd. to provide a fairness opinion in respect of the Proposed Offer. Unlike RBC, Raymond James is not independent from the Management Group, and its fairness opinion is not independent financial advice nor does it constitute a formal valuation by an independent valuator as required under MI 61-101. Raymond James Ltd. was not engaged at the request of the Special Committee and is acting for the Management Group and not the Company. As noted, the Special Committee has retained RBC as its independent financial advisor, and RBC's independent formal valuation will be made available to shareholders for their consideration in assessing the Proposed Offer.

  • The Special Committee intends to evaluate the Proposed Offer and will consider alternatives available in the circumstances, including contacting third parties to gauge their interest in making competing bids for the Company or its assets or businesses. The Special Committee acknowledges that the Management Group has stated that it collectively owns approximately 21.3% of the outstanding common shares of the Company and is not interested in supporting any alternative transaction, and that a significant shareholder of the Company holding approximately 8.8% of the outstanding common shares has entered into an irrevocable lock-up agreement in support of the Proposed Offer, which may impact the availability of any such alternatives.

  • The Proposed Offer does not contemplate the acquisition of the Company's outstanding preferred shares and any transaction would not be conditional on same.

Shareholders are cautioned that there can be no assurance that the Proposed Offer or any other transaction will be completed.

ABOUT CANACCORD GENUITY GROUP INC.

Through its principal subsidiaries, the Company is a leading independent, full-service financial services firm, with operations in two principal segments of the securities industry: wealth management and capital markets. Since its establishment in 1950, the Company has been driven by an unwavering commitment to building lasting client relationships. We achieve this by generating value for our individual, institutional and corporate clients through comprehensive investment solutions, brokerage services and investment banking services. The Company has wealth management offices located in Canada, the UK, Guernsey, Jersey, the Isle of Man and Australia. The Company's international capital markets division operates in North America, UK & Europe, Asia, Australia, and the Middle East.

Canaccord Genuity Group Inc. is publicly traded under the symbol CF on the TSX.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS:

This press release may contain "forward-looking information" as defined under applicable securities laws ("forward-looking statements"). These statements relate to future events or future performance and reflect management's expectations, beliefs, plans, estimates, intentions and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts, including business and economic conditions and Canaccord Genuity Group's growth, results of operations, performance and business prospects and opportunities. Such forward- looking statements reflect management's current beliefs and are based on information currently available to management. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", "target", "intend", "could" or the negative of these terms or other comparable terminology. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and a number of factors could cause actual events or results to differ materially from the results discussed in the forward-looking statements.

In evaluating these statements, readers should specifically consider various factors that may cause actual results to differ materially from any forward-looking statement. These factors include, but are not limited to, whether any alternative transaction to the Proposed Offer may emerge; the possibility that the mailed take-over bid circular contains terms that differ from those that are currently contemplated in the Proposed Offer; the possibility that the Management Group may not be able to obtain or satisfy, in a timely manner or otherwise, the required shareholder and regulatory approval and other conditions of closing necessary to complete the Proposed Offer; market and general economic conditions (including slowing economic growth, inflation and rising interest rates); the dynamic nature of the financial services industry; the potential continued impacts of the coronavirus (COVID-19) pandemic on the Company's business operations and on the global economy; the impact of the war in Ukraine and the resulting humanitarian crisis on the global economy, in particular its effect on global oil, agriculture and commodity markets; and the risks and uncertainties discussed from time to time in the Company's interim condensed and annual consolidated financial statements, its annual report and its annual information form ("AIF") filed on www.sedar.com as well as the factors discussed in the sections entitled "Risk Management" and "Risk Factors" in the AIF, which include market, liquidity, credit, operational, legal and regulatory risks.

Although the forward-looking statements contained in this press release are based upon assumptions that the Company believes are reasonable, there can be no assurance that actual results will be consistent with these forward-looking statements. The forward-looking statements contained in this press release are made as of the date of this press release and should not be relied upon as representing the Company's views as of any date subsequent to the date of this press release. Except as may be required by applicable law, the Company does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether as a result of new information, further developments or otherwise.

SOURCE Canaccord Genuity Group Inc.

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