Desjardins Financial Group announces all-cash offer to acquire Western Financial Group
· Desjardins Financial Group agrees to make all-cash offer of $4.15 per share representing a 70% premium, for a total transaction value of $ 443 million
· Desjardins Financial Group will rely on a solid platform in Western Canada for global products distribution to best serve existing Western Financial Group clients and Desjardins’ clientele across the country
· Western Financial Group provides a well established Property and Casualty brokerage insurance distribution network in Western Canada and a complementary suite of financial products and services in life insurance, pet insurance and personal and commercial banking.
Lévis (Qc), High River (Alta); December 23rd, 2010 – Desjardins Financial Group, the leading cooperative financial group in Canada (‘’Desjardins’’), announced today that it has entered into a support agreement with Western Financial Group (TSX:WES), the largest insurance and financial services retailer in Western Canada with 121 offices in British Columbia, Alberta, Saskatchewan and Manitoba, pursuant to which it will acquire all of the issued and outstanding common shares of Western Financial at a price of $4.15 per common share in cash (the ‘’Offer’’) for a total transaction value of $443 million.
“We are delighted that Western Financial recognizes the value of our offer. This transaction will allow us to accelerate our business development in Western Canada, and in that way, it is perfectly aligned with our strategic plan,” stated Desjardins Financial Group Chair of the Board, President and CEO, Monique F. Leroux. “We are always open to growth opportunities and partnerships that will further benefit our members and clients and contribute to the long term development of our cooperative financial group.”
Scott Tannas, founding President and Chief Executive Officer of Western Financial Group, said: "We are confident that our acquisition by the Desjardins Financial Group, a rapidly expanding and innovative winner in Canadian financial services, will serve the interests of our shareholders, customers, employees and communities. At a time when other smaller financial services companies are being swallowed up into monolithic corporate entities, our special Western Financial Group brand -- a brand with deep roots in the heartlands of Canada -- will be maintained and, indeed, enhanced, under the broad Desjardins umbrella.”
Mr. Tannas added: “Our half-million customers, who always come first in our business priorities, will benefit from this transaction. They will have more choices at more competitive prices. Our shareholders, who have been patient in these recessionary times, will enjoy a fair payout. Our staff can rest assured that, by keeping our distinctive Western brand and by maintaining our headquarters here in High River, we will have even greater opportunities to expand our market share as we benefit from being part of the Desjardins Financial Group. In all of the communities where we have offices, people will still be served by the knowledgeable Western Financial folk who are themselves proud and resourceful members of these communities.”
The transaction contemplated by the Offer will be carried out by way of a take-over bid through Desjardins Financial Corporation Inc., a wholly-owned subsidiary of Desjardins Financial Group. Western Financial Group has entered into a support agreement with Desjardins Financial Corporation, confirming that it will support the offer subject to customary conditions. The Offer values Western Financial Group at approximately $443 million and also includes the assumption of Western Financial Group’s net debt of $56.4 million. It represents a 70% premium to Western Financial’s closing share price on the TSX on December 22, 2010 and a 67% premium to the 30 day volume weighted average closing share price on the TSX ended December 22, 2010. The Offer is subject to customary conditions, including the tender of at least 66 2/3% of outstanding common shares to the Offer, no material adverse changes to Western Financial’s business and the receipt of all applicable regulatory approvals. Full details of the Offer will be included in a formal offer and take-over bid circular. The transaction is expected to close in the second quarter of 2011.
Holders of convertible preferred shares and convertible unsecured debentures of Western Financial may participate in the Offer by converting such securities into common shares of Western Financial Group and tendering such shares to the Offer. By exercising the relevant conversion rights and participating in the Offer, holders of the following securities would receive the following premiums over par values: Series 2 preferred shares - 15%; Series 5 preferred shares - 48%; and convertible unsecured debentures - 38%.
The transaction has been approved by the Board of Directors of Western Financial Group which has unanimously resolved to recommend that holders of common shares accept the Offer. Western Financial's financial advisor, TD Securities Inc., has provided an opinion to the Western Financial Board of Directors that the consideration to be paid by Desjardins Financial Group under the Offer is fair, from a financial point of view, to the Western Financial common shareholders.
The support agreement imposes customary restrictive covenants on Western Financial and includes customary termination provisions for transactions of this nature. Western Financial has agreed to pay a termination fee of $10.0 million to Desjardins in certain circumstances.
Desjardins Securities is acting as sole financial advisor to Desjardins Financial Group in completing this transaction. TD Securities Inc. is acting as sole financial advisor to Western Financial Group.
About Desjardins Financial Group
Awarded the coveted title “Bank of the Year 2010 – Canada” by a global magazine The Banker, Desjardins Financial Group is the leading cooperative financial group in Canada and the sixth largest in the world, with assets of over $175 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 42,200 employees and the commitment of near 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. Its 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.westernfinancial group.ca.
FOR FURTHER INFORMATION OR INTERVIEW REQUESTS
On behalf of Desjardins Financial Group:
André Chapleau – 1 866 866-7000, extension 7229
On behalf of Western Financial Group:
Jason Hatcher (Spotlight Strategies) – (403) 829-6796
January 10, 2022
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