Desjardins Financial Group Acquires 95.5 % of Outstanding Common Shares of Western Financial Group
Lévis (Qc), High River (Alta), April 15, 2011 – Desjardins Financial Group ("Desjardins") announced today that its offer (the "Common Share Offer") to acquire all of the issued and outstanding common shares of Western Financial Group Inc. (“Western”) has expired and that it has taken up and accepted for payment the shares tendered under the Common Share Offer. Desjardins will pay for the tendered shares on or about April 20, 2011.
“We are extremely satisfied that our offer was accepted by the vast majority of the shareholders,” said Monique F. Leroux, Desjardins Financial Group Chair of the Board, president and CEO. “As Western Financial Group continues to develop its business in Western Canada, we look forward to leveraging the entrepreneurial spirit that exists within the company and to supporting Western’s continued growth and success.”
Ms. Leroux also announced that Mr. Jim Dinning will remain Chairman of the Board of Western Financial Group and that Mr. Scott Tannas will continue as its President and CEO. He will also remain on Western’s Board. “We feel privileged to count on the expertise and commitment of such gifted individuals, as well as on the management and employees of Western Financial Group,” she added.
“We are delighted to have the overwhelming support of shareholders for this transaction. Western Financial Group today begins a new era in its growth and development. We are excited to join the Desjardins organization, and look forward to much success together,” said Scott Tannas, founding President and Chief Executive Officer of Western Financial Group.
A total of 68 642 434 common shares, representing approximately 95.5 % of the outstanding common shares on April 15, 2011 and 82.6 % of the fully diluted common shares (after conversion of all outstanding in-the-money convertible securities of Western) were tendered under the Common Share Offer. As such, the minimum tender condition associated with the Common Share Offer has been satisfied and Desjardins has taken up the tendered shares.
Desjardins also announced that it has satisfied or waived all conditions relating to the offers to acquire all of the issued and outstanding First Preferred Shares, Series Three and First Preferred Shares, Series Four (the “Preferred Share Offers”) and has taken up and accepted for payment 70 213 First Preferred Shares, Series Three and 48 944 First Preferred Shares, Series Four. Desjardins will also pay for such tendered shares on or about April 20, 2011.
Desjardins is extending the expiry date of the Preferred Share Offers to 5:00 p.m. (Montréal Time) on May 2, 2011 to allow holders an additional opportunity to tender to such Preferred Share Offers. All other terms of the Preferred Share Offers remain the same. A formal notice of extension will be mailed to holders in due course. The notice of extension will be filed on SEDAR and will be available at www.sedar.com.
Desjardins intends to take up and pay for additional shares tendered to the Preferred Share Offers on May 2, 2011. Holders who have already tendered their shares do not need to take any further action to accept the Preferred Share Offers. Holders who have not yet tendered their shares in acceptance of the Preferred Share Offers may do so at any time prior to 5:00 pm (Montréal Time) on May 2, 2011.
Holders are advised that Desjardins does not intend to further extend the Preferred Share Offers beyond May 2, 2011 and there can be no assurance that another liquidity event will be available to holders in the foreseeable future.
Immediately following the take-up of common shares pursuant to the Common Share Offer, and as contemplated in the support agreement dated December 23, 2010 between Desjardins and Western, the Board of Directors of Western has accepted the resignations of Mr. J. Gregg Speirs, Mr. Gabor Jellinek, Mr. Philip L. Webster, Ms. Diane Brickner, Mr. Bill Yuill and Mr. Robert G. Jennings. Desjardins has appointed Mr. Jim Dinning who will act as Chairman, Mr. Scott Tannas, Mr. Robert Herdman, Mr. Doug Buchanan, Ms. Sylvie Paquette, Messrs. Normand Desautels, Stéphane Achard and Pierre Mathieu.
Desjardins intends to acquire all of the remaining common shares of Western by way of a subsequent acquisition transaction between Desjardins Financial Corporation Inc. and Western. This transaction will be submitted for approval by holders of common shares at a special meeting of shareholders to be held in July, 2011.
Desjardins also intends to cause Western to send in the coming days a notice to all holders of outstanding convertible unsecured subordinated debentures of Western (the “Debentures”) announcing that all outstanding Debentures will be redeemed by Western at a price equal to 102% of the principal amount of the Debentures, plus accrued and unpaid interest at the time of their redemption, 30 days following the delivery of such notice, in accordance with the redemption rights attached to the Debentures following the occurrence of a change of control.
Desjardins also intends to cause Western to redeem all outstanding First Preferred Shares, Series Two of Western (the “Series 2 Shares”) on June 30, 2011. As such, Western will send a notice to all holders of Series 2 Shares in early May, 2011 indicating Western’s intention to redeem all outstanding Series 2 Shares in accordance with the redemption rights attached to the Series 2 Shares for a redemption amount (the “Redemption Amount’) per Series 2 Share equal to $100 plus all declared and unpaid dividends on the redemption date.
In accordance with the terms of the Series 2 Shares, the Redemption Amount will be satisfied by issuing common shares of Western. The number of common shares that holders will be entitled to receive in satisfaction of the Redemption Amount will be determined by dividing the Redemption Amount by 95% of the prior average 20-day weighted average trading price of the common shares prior to the date of redemption. It is Desjardins’ intention to acquire any common shares issued to the holders of Series 2 Shares for a payment of $4.15 in cash per common share in July, 2011.
Holders of the Debentures and Series 2 Shares may, until the close of business on the last business day immediately preceding the respective redemption dates, convert their Debentures and Series 2 Shares into common shares of Western in accordance with the terms of the Debentures and Series 2 Shares. Common shares issued upon such conversion will be acquired by Western pursuant to the subsequent acquisition transaction in July, 2011, for a payment of $4.15 in cash per common share.
FORWARD LOOKING INFORMATION
Certain statements contained in this News Release are forward-looking statements (as defined in applicable securities legislation). Examples of such statements include, but are not limited to, statements concerning Desjardins’ intention to undertake a second step transaction in respect of the common shares or to effect the redemption of the Debentures or the Series 2 Shares. Inherent in forward-looking statements are risks and uncertainties well beyond Desjardins’ ability to predict or control. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this News Release. While Desjardins anticipates that subsequent events and developments may cause Desjardins’ views to change, Desjardins specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing Desjardins’ views as of any date subsequent to the date of this news release. Although Desjardins has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. These factors are not intended to represent a complete list of the factors that could affect Desjardins, Western, or the consummation of the transactions contemplated herein.
About Desjardins Financial Group
Awarded the coveted title “Bank of the Year 2010 — Canada” by the UK magazine The Banker, Desjardins Group is the leading cooperative financial group in Canada and the sixth largest in the world, with assets of over $172 billion. Drawing on the strength of its caisse network in Québec and Ontario, and its subsidiaries across Canada, it offers a full range of financial products and services to its 5.8 million members and clients. Desjardins specializes in Wealth Management and Life and Health Insurance, in Property and Casualty Insurance, in Personal Services, in Business and Institutional Services. As one of the largest employers in the country and one of Canada’s 10 Most Admired Corporate CulturesTM of 2010, Desjardins is supported by the skills of its 42,500 employees and the commitment of nearly 6,000 elected officers. For more information, visit www.desjardins.com.
About Western Financial Group
Western Financial Group provides property, liability and life insurance as well as banking and investment services for more than 550,000 customers in Western Canada. Our business units include:
The Network is the largest property and casualty brokerage in Western Canada, providing auto, home, farm and business insurance to residents of 96 communities. In most locations we also offer life insurance products travel insurance some investment services, and deposit and loan services such as the purchase of GICs, as well as personal and commercial mortgages and loans.
Bank West is a virtual bank accessible through brokers and customer service agents, focused on commercial, agricultural, recreational vehicle and several types of personal lending, and GICs.
Western Life partners with others who have a customer relationship in place with a product line including Individual Life, Disability and Critical Illness products, Group Health for small employer groups, A&S products designed for niche contexts and many variations of Creditor Insurance products.
Western Financial Insurance is Canada’s oldest and largest pet insurance provider under the brand name PetSecure, leading the market place since 1989 in providing Canadian pet parents with innovative coverage to meet the diverse needs of their pets.
For more information on Western visit www.westernfg.ca.
FOR FURTHER INFORMATION:
Western shareholders with procedural questions regarding the Offers process should contact Georgeson, the Information Agent for the Offers at the toll free number 1-866-725-6575 or by email at firstname.lastname@example.org.
On behalf of Desjardins Financial Group
André Chapleau, Director of Media Relations 514-281-7229 or 1-866-866-7000, extension 7229
On behalf of Western Financial Group
Arlene Beggs, Executive Assistant to the CEO 403-652-2663