Shares of Canadian investment bank Canaccord Genuity rose 30% on reports that management wants to take the firm private in a $1.13 billion deal.
The management team, which includes the Toronto firm’s chief executive officer (CEO) and a dozen senior executives, own a combined 21% of Canaccord’s stock.
Canaccord’s management team is proposing to pay $11.25 per share to buy the company outright and take it private.
However, an independent committee at Canaccord says it hasn’t agreed to recommend the offer to shareholders, and it has hired legal counsel, setting up a potential battle over the future of the company.
The move to take Canaccord private comes after the company’s share price fell nearly 50% since stock markets peaked in November 2021.
Canaccord has struggled as the market for initial public offerings (IPOs) and other deals dried up due to the stock market downturn over the past year.
The offer from management represents a 31% premium to the closing stock price on January 7 of this year. However, the offer is not much higher than the $10.25 price the stock traded at immediately following its 2004 IPO.
The independent board committee met with the buyout group and said it wasn’t prepared to support an offer of $11.25 per share, based on a preliminary financial analysis.
The committee said it would also consider alternative offers and contact third parties to gauge their interest in competing bids.
