Dividend Growth Split Corp.

Dividend Growth Split Corp.

November 20, 2007 09:57 ET

Dividend Growth Split Corp. Announces Exchange Ratios

TORONTO, ONTARIO--(Marketwire - Nov. 20, 2007) - Dividend Growth Split Corp. (the "Company"), a split share corporation offering an investment in the common shares of those high dividend growth rate companies listed in the table below (each an "Exchange Eligible Issuer") through its Class A Shares and Preferred Shares (the "Shares"), is pleased to announce the exchange ratios for the Company's exchange option (the "Exchange Option") with respect to its initial public offering. Under the Exchange Option, prospective purchasers could purchase, by an exchange of freely tradeable shares of Exchange Eligible Issuers, either Class A Shares and Preferred Shares together in Units (each consisting of one Class A Share and one Preferred Share) or only Class A Shares (the "Exchange Option"). The Exchange Option expired at 5:00 p.m. on November 15, 2007.

Under the Exchange Option for Units, the number of Units issuable in exchange for each share of an Exchange Eligible Issuer deposited by a prospective purchaser was determined by dividing the weighted average trading price of the shares of such Exchange Eligible Issuer on the TSX during the three consecutive trading days ending on November 16, 2007, adjusted to reflect dividends and distributions, if any, declared by the Exchange Eligible Issuer that will not be received by the Company (the "Exchange Price") by $25.00 (being the sum of the original issue price of one Class A Share and one Preferred Share). The exchange ratios were rounded down to four decimal places.

Under the Exchange Option for Class A Shares, the number of Class A Shares issuable in exchange for each share of an Exchange Eligible Issuer deposited was determined by dividing the Exchange Price by $15.01 (being the original issue price of a Class A Share, adjusted to reflect the $0.01 in cash per Class A Share to be received by prospective purchasers who utilized the Exchange Option for Class A Shares).

The following table indicates the Exchange Price and the exchange ratio for the common shares of each Exchange Eligible Issuer (the exchange ratios were rounded down to four decimal places):



Exchange
Ratio Exchange
(Class A Ratio
Exchange Eligible Issuer Exchange Shares per (Units per
(TSX Ticker Symbol) Price Issuer) Issuer)
--------------------------------------------------------------------------
AGF Management Limited (AGF.B) $32.0005 2.1319 1.2800
Bank of Montreal (BMO) $57.3155 3.8184 2.2926
Canadian Imperial Bank of Commerce (CM) $90.4724 6.0274 3.6188
Canadian Utilities Limited (CU) $50.9180 3.3922 2.0367
Enbridge Inc. (ENB) $37.0670 2.4694 1.4826
Great-West Lifeco Inc. (GWO) $34.5284 2.3003 1.3811
IGM Financial Inc. (IGM) $52.1154 3.4720 2.0846
Industrial Alliance Insurance and
Financial Services Inc. (IAG) $40.5994 2.7048 1.6239
Manitoba Telecom Services Inc. (MBT) $44.2922 2.9508 1.7716
Manulife Financial Corporation (MFC) $40.2268 2.6800 1.6090
National Bank of Canada (NA) $51.6596 3.4416 2.0663
Power Corporation of Canada (POW) $38.2557 2.5486 1.5302
Royal Bank of Canada (RY) $51.7124 3.4451 2.0684
Shaw Communications Inc. (SJR.B) $24.4704 1.6302 0.9788
Sun Life Financial Inc. (SLF) $52.0203 3.4657 2.0808
Teck Cominco Limited (TCK.B) $41.9696 2.7961 1.6787
TELUS Corporation (T.A) $49.0539 3.2680 1.9621
The Bank of Nova Scotia (BNS) $50.6810 3.3764 2.0272
The Toronto-Dominion Bank (TD) $67.0602 4.4676 2.6824
TransCanada Corporation (TRP) $39.2646 2.6158 1.5705


Fractional shares will not be issued. If a purchaser of shares who utilized the Exchange Option for Units has deposited shares of an Exchange Eligible Issuer pursuant to the Exchange Option, and if the exchange of such shares for Units would otherwise result in the issuance of a fractional Class A Share or Preferred Share, the Company will, upon closing, forward a cash payment to such purchaser, equal to $25.00 multiplied by such fraction, in lieu of issuing a fractional share.

Under the Exchange Option for Class A Shares, purchasers will similarly receive cash in lieu of any fractional share, and will also receive $0.01 in cash per Class A Share. Accordingly, if a purchaser of Class A Shares has deposited shares of an Exchange Eligible Issuer pursuant to the Exchange Option, the Company will, upon closing, forward a cash payment to such prospective purchaser equal to the sum of (a) if the exchange of such shares for Class A Shares would otherwise result in the issuance of a fractional Class A Share, $15.00 multiplied by such fraction, and (b) $0.01 multiplied by the number of Class A Shares received.

Purchasers who wish to exchange shares of Exchange Eligible Issuers on a tax-deferred basis must submit to the Company a signed and completed Tax Election Package no later than 30 days after the closing date. A copy of the Tax Election Package and guidance on completing the package is available on www.bromptongroup.com.

Dividend Growth Split Corp. has been created to provide investors with an investment in 20 large capitalization Canadian equities selected from those TSX-listed equities that have demonstrated the highest dividend growth rates over a five year period and have a current dividend yield of at least 2% per annum, utilizing a split share structure on a low cost basis.

Class A shareholders will receive the benefits of monthly cash distributions targeted to be 8.0% per annum, low management fees and the opportunity for growth in net asset value. Preferred shareholders will receive attractive quarterly distributions of 5.25% per annum supported by the high credit quality of the underlying assets. Highstreet Asset Management Inc. has been retained to selectively write covered call and cash covered put options to generate additional distributable income for the fund.

The offering is scheduled to close on December 3, 2007.

The syndicate of agents for the offering is being co-led by RBC Capital Markets, CIBC World Markets Inc. and Scotia Capital Inc. and includes TD Securities Inc., BMO Nesbitt Burns Inc., National Bank Financial Inc., HSBC Securities (Canada) Inc., Canaccord Capital Corporation, Desjardins Securities Inc., Dundee Securities Corporation, Raymond James Ltd., Wellington West Capital Inc., Blackmont Capital Inc., IPC Securities Corporation and Research Capital Corporation.

For further information, please contact your financial advisor or visit our website at www.bromptongroup.com.

Commissions, trailing commissions, management fees and expenses all may be associated with investment funds. Please read the prospectus before investing. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.

Contact Information

  • Brompton Funds Management Limited
    David E. Roode
    Senior Vice-President
    (416) 642-6008
    Website: www.bromptongroup.com