CI, Sun Life, and Scotia
First Published: ADawnJournal.com Published on: Aug 24, 2008
Last Friday's talk of the town was CI Financial's possible merger or acquisition news. CI confirmed that over the past few months, it has had discussions with a number of parties for possible strategic combinations.
News broke out on Friday stating CI was looking into buying Scotia Bank's mutual fund business. In return, Scotia wanted a stake in CI.
CI shares were halted on Friday morning on the Toronto Stock Exchange when the news broke. Later on, CI's shares were up 5% and total shares traded doubled than the day before.
Sun Life Financial holds a 37% stake in CI. In case this transaction goes through, CI has to issue a considerable chunk of its shares (estimated 25% but Scotia wants more) to Scotia. It's hard to predict what's going on in Sun Life's mind, but it makes sense to think that they may not be happy about this deal.
CI is Canada's second largest fund manager. CI made many successful and unsuccessful bids in the past. Read CI Financial's Unsolicited, Hostile Bid to know more about this.