Corus to Catalyst: Thanks but no thanks for proposed rights offering

The Corus/Shaw Communications/Catalyst battle – a battle over valuations, financial disclosure and the allocation of value from the Corus minority – reached a predictable turning point now when the target rejected a proposal for any rights offering where all shareholders would participate.

As a part of its information circular, Catalyst, which holds 321,000 Class B Corus shares, said “the chance to invest” ought to be available to all shareholders and not just a limited number. (Corus has 84.5 million shares outstanding.)

Catalyst proposed to backstop a $263 million rights offering “on exactly the same terms” because the subscription receipt offering. With that deal, Corus sold 29.21 million receipts at $9 a share. Using a private placement, the Shaw family bought 3.56 million shares also at $9.

Corus, whose shareholders gather next week to vote around the $2.65 billion transaction, rejected that proposal, arguing it “is both unworkable and self-interested.” Corus said the proposal would “needlessly increase risk for shareholders simply by entering into a rights offering by having an opportunistic fund.”

In its rejection, Corus dismissed the Catalyst proposal as “hypothetical.”

THE SMALL AND THE BIG

Both are building their businesses, both attract different areas and have now taken the main steps to attain their set goals.

At one end from the scale is Montreal-based CoPower, “an online platform for clean energy investing,” that has closed its first green bond offering.

The fund achieved its target of $300,000 from a number of retail investors who participated a few weeks after prospectus exemption rules came into effect in many the provinces. (Just before this, CoPower, formed in 2013, raised funds via an offering memorandum.)

Investors, who ranged in age from 24-87, committed for five years and were required to undergo a two-step process – the very first, the registration tactic to determine whether these were suitable, and the second, the investment decision to decide if they desired to participate. Investor contributions ranged from $5,000 to $20,000.

The fund, that is backed by a pool of green loans, offered 5 per cent and over its term investors will get a blend of interest and principal.

Trish Nixon, a partner at Co-Power is content using the process that she said demonstrated the online strategy and the investment thesis. Too the capital grew up in three weeks, about half time the company had expected. Not every investors received an allocation, which means they’ll be head of the line for Co-Power’s next offering.

At another end of the scale is Foresters Life insurance coverage Co., which acquired Aegon Capital Management and Aegon Fund Management, two firms with $10 billion of assets under management. For Foresters, buying marks its entry into the Canadian asset management business.

But Foresters isn’t any stranger to management of your capital: just before acquiring Aegon, the international financial services provider, had $34 billion under management. A U.S. based unit of Foresters manages that $34 billion. (Foresters’ Canadian assets were managed by an interior investment department.)

In 2011, Foresters took its start if this acquired the privately-held First Investors Consolidated Corp. and its asset management and life insurance operations. At that time, First Investors had US$7 billion under management, mostly in 27 mutual funds.

bcritchley@nationalpost.com