Western Financial Group Inc. and Desjardins Financial Corporation Inc. Approve Amalgamation
Western Financial Group Inc. and Desjardins Financial Corporation Inc. Approve the Execution of an Amalgamation Agreement and the Date of Special Meeting of Western Shareholders to Approve the Amalgamation
Western Financial Group Inc. Announces the Redemption of all First Preferred Shares, Series Two
Lévis (Qc), High River (Alta), May 27, 2011 – Western Financial Group Inc. (“Western”) and Desjardins Financial Corporation Inc. (“Desjardins”) announced today that Western’s board of directors has approved the execution of an amalgamation agreement (the “Amalgamation Agreement”) with, a direct wholly-owned subsidiary of Desjardins (“Newco”) whereby Western will amalgamate with Newco (the “Amalgamation”). The amalgamated corporation resulting from the Amalgamation will continue under the name Western Financial Group Inc.
A special meeting of all holders of shares in the share capital of Western (the “Shareholders”) will be held at 10:30 a.m. on July 7, 2011 at the head office of the Corporation located at 1010 – 24th Street, S.E., High River, Alberta, to consider, and if deemed appropriate, to approve the Amalgamation. An information circular will be mailed to the Shareholders of record on June 6, 2011. The information circular and letter of transmittal and proxy form will be filed on SEDAR and will be available at www.sedar.com following their mailing to the Shareholders.
The announcement of the execution of the Amalgamation Agreement follows Desjardins’ prior offer made on January 21, 2011 to purchase all of the outstanding common shares in the share capital of Western (the “Common Shares”) for $4.15 per Common Share, and all of the First Preferred Shares, Series Three and Series Four of Western, each for $100 (the “Offers”) and Desjardins’ subsequent taking up of 68,642,434 Common Shares, 70,363 First Preferred Shares, Series Three and 49,244 First Preferred Shares, Series Four in the share capital of Western. In its circular relating the Offers, Desjardins had disclosed its intention to acquire the remainder of the Common
Shares under a subsequent acquisition transaction, including by way of an amalgamation.
Pursuant to the Amalgamation, each issued and outstanding Common Share, other than those currently held by Desjardins and any dissenting Shareholders, will be converted into a redeemable preferred share of the amalgamated corporation (an “Amalco Redeemable Preferred Share”) which will be immediately redeemed upon the coming into effect of the Amalgamation for a redemption amount of $4.15 per share. Also, pursuant to the Amalgamation, each of the First Preferred Shares, Series Three, Series Four and Series Five of Western will be converted into First Preferred Shares, Series Three, Series Four and Series Five, respectively, of the amalgamated corporation (the “Amalco First Preferred Shares”). The Amalco First Preferred Shares will have the same attributes as the First Preferred Shares of Western in all respects, except that the provisions of the Amalco First Preferred Shares will be consistent with and reflect the fact that the Amalgamation constitutes a “Capital Reorganization” under the terms of the First Preferred Shares of Western and that the Common Shares will no longer be listed on the TSX following the Amalgamation. Consequently, following the Amalgamation, a holder of Amalco First Preferred Shares will receive upon their conversion a number of Amalco Redeemable Preferred Shares equal to the number of Common Shares such holder would have been entitled to receive upon conversion of his First Preferred Shares of Western prior to the Amalgamation, and will receive $4.15 in cash upon the immediate subsequent redemption of each such Amalco Redeemable Preferred Share. The Amalco First Preferred Shares are expected to remain listed on the TSX.
As a result of the Amalgamation, Desjardins will own, directly and indirectly, all of the outstanding common shares of the amalgamated corporation.
The Amalgamation is subject to (i) the approval of not less than 66?% of the votes cast by the Shareholders and of not less than 50%+1 of the votes cast by the holders of Common Shares and entitled to vote in order to meet the minority approval requirement set out in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions and (ii) other customary closing conditions. The Amalgamation is expected to take effect as soon as practicable after the completion of the conditions set forth in the Amalgamation Agreement.
Desjardins has advised Western that it intends to vote all of the shares it currently holds in the share capital of Western in favour of the Amalgamation. Accordingly, Desjardins and its affiliates own a sufficient number of shares of Western to approve the Amalgamation.
Redemption of all First Preferred Shares, Series Two
Western also announced today that it will exercise its right to redeem all of its outstanding First Preferred Shares, Series Two (the “Series 2 Shares”) in accordance with the terms and conditions attached to the Series 2 Shares. A notice of redemption, together with the related letter of
transmittal was sent today to registered holders of Series 2 Shares.
The redemption date of the Series 2 Shares will be June 30, 2011 and the redemption price will be $100 plus all declared but unpaid dividends on each Series 2 Share, if any (the “Redemption Amount”).
Western will satisfy the Redemption Amount by issuing fully paid and non-assessable Common Shares from its share capital. Holders of Series 2 Shares will be entitled to receive on the
Redemption Date, for each Series 2 Share held, that number of Common Shares (the “Redemption Shares”) obtained by dividing (i) the Redemption Amount, by (ii) 95% of the Current Market Price of the Common Shares as of the date immediately prior to the Redemption Date, subject to amounts required to be withheld under applicable tax laws, if any. The “Current Market Price” means the weighted average of the closing trading price per Common Share for the 20 consecutive days on which at least one board lot of Common Shares is traded on the Toronto Stock Exchange immediately prior to the Redemption Date.
In order to receive their Redemption Shares, holders of Series 2 Shares must deliver to Computershare Trust Company of Canada (the “Transfer Agent”), at either of the addresses set out in the letter of transmittal accompanying the notice of redemption, share certificates representing their Series 2 Shares surrendered for redemption.
From and after the Redemption Date, the holders of Series 2 Shares will not be entitled to exercise any of the rights attached to the Series 2 Shares.
Holders of Series 2 Shares may, until the close of business on the last business day immediately preceding the Redemption Date, exercise their right to convert Series 2 Shares, in whole or in part, into Common Shares by surrendering the certificate or certificates representing such Series 2 Shares to the Transfer Agent. Holders of Series 2 Shares electing to convert Series 2 Shares on or prior to the Redemption Date will be entitled to receive, for each converted Series 2 Share, (i) that number of Common Shares obtained by dividing $100 by $3.60, and (ii) a cash payment from Western in the amount of all declared but unpaid dividends on each Series 2 Share, if any.
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 $184 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
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.
Information (For Media only):
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