DundeeWealth Inc.
TSX : DW

DundeeWealth Inc.

November 01, 2006 10:22 ET

Dundee Wealth Proposes Internal Merger

TORONTO, ONTARIO--(CCNMatthews - Nov. 1, 2006) - Dundee Wealth Management Inc. (TSX:DW) announced today that its board of directors has agreed in principle to amalgamate DWM Inc., the company's 83.7% owned subsidiary, with Dundee Wealth effective January 1, 2007. Completion of the amalgamation will be subject to receipt of all necessary shareholder and regulatory approvals and other customary conditions precedent.

The amalgamation will result in the elimination of DWM Inc., a private company owned as to 83.7% by Dundee Wealth and 16.3% by la Caisse de depot et placement du Quebec ("CDP"). The amalgamation requires the approval of the shareholders of both Dundee Wealth and DWM Inc. Dundee Wealth will be calling a special meeting of its shareholders to be held on December 29, 2006, for this purpose.

DWM Inc. was created in 2002 when Dundee Wealth acquired StrategicNova Inc. from CDP. At that time, a Shareholders' Agreement was entered into between Dundee Wealth and CDP involving DWM Inc. Most of the terms of the Shareholders' Agreement will terminate upon the merger, however, rights relating to pre-emption, prospectus rights and board seats will remain.

Dundee Wealth's only asset is its 83.7% investment in DWM Inc. Accordingly, pursuant to the merger, CDP will receive shares in accordance with a formula which would give CDP an equivalent percentage ownership in Dundee Wealth that it holds in DWM Inc. based upon the shares outstanding as at the date of the amalgamation. Based upon the current number of Dundee Wealth shares outstanding, CDP would receive approximately 20,550,000 common shares on the amalgamation. The holdings of all other holders of securities of Dundee Wealth will be unaffected as a result of the amalgamation.

CDP has a 20 business day period from the completion of the amalgamation within which to exercise a put right rather than receive shares of Dundee Wealth on the merger. Pursuant to the put right, CDP can elect to put its shares in DWM Inc. back to the company for cancellation based upon an "en bloc" fair market value calculation, as defined in the Shareholders' Agreement, and payable in cash. Dundee Wealth has sufficient resources to meet this potential obligation.

Furthermore, the company is re-evaluating its plans with regard to the previously announced income trust reorganization of Goodman & Company, Investment Counsel Ltd. in light of the recent announcements by the Minister of Finance. In any event, such income trust reorganization would not have been completed until after the amalgamation is finalized and the company has been advised by CDP of its intentions with respect to the amalgamation.

Dundee Wealth is Canadian owned, TSX listed, innovative wealth management company. Through its various subsidiaries and through Dundee Bank of Canada, a Schedule 1 chartered bank, Dundee Wealth creates and provides investment solutions as well as capital markets and advisory services for financial advisors, institutions, corporations and foundations. Dundee Wealth oversees $51.1 billion in assets under management and administration through independent financial advisors across Canada.

Contact Information

  • Ned Goodman
    President and CEO
    Dundee Wealth Management Inc.
    (416) 365-5665
    or
    Joanne Ferstman
    Chief Financial Officer
    Dundee Wealth Management Inc.
    (416) 365-5010