Crescendo Partners, a Large Shareholder of Canaccord Genuity Issues Open Letter to Canaccord Special Committee Chair
11 March 2023 - 7:54AM
Crescendo Partners, a New York City based investment firm that
beneficially owns a sizable position in the common stock of
Canaccord Genuity Group, Inc.,(TSX: CF), today, issued an open
letter to Canaccord’s Chair of the Special Committee, Jill Denham,
regarding the proposal to take the company private.
The full text of the letter follows:
Crescendo Partners777 3rdAvenue37thFloorNew York,
NY 10017(212)-319-7676
March 10th, 2023
Ms. Jill Denham Chair of the Special Committee
Canaccord Genuity 609 Granville Street Suite 2200 Vancouver, Canada
V7Y 1H2
Dear Jill,
Crescendo Partners and its affiliates
(“Crescendo”) are large shareholders of Canaccord Genuity
(“Canaccord” or “the Company”). I write to you to address the
current untenable position in which the Special Committee and
Canaccord now find themselves. My viewpoint is informed by my
recent experience of being a board member of Canaccord and by my
extensive experience in the capital markets in Canada and the
United States.
I believe Canaccord is not well suited to continue
being a public company. Despite efforts over the last 15 years to
lessen the cyclicality of the business, no long-term shareholder
value has been created. The ideal time to have sold the company was
at the peak of the last cycle, but the rest of the board rejected
exploring that path when I had proposed it.
Now the shareholders are being offered a very
substantial premium to the trading price of the stock over the last
several months. I believe there is an immediate opportunity for the
Special Committee and the Management Group proposing to buy the
Company to reach an agreement on an improved price.
The Management Group’s position that they are only
buyers and not sellers make it virtually impossible for any other
buyer to purchase such a people intensive business. You have hired
Barclays to explore the sale of Canaccord or parts of the Company.
In my opinion, simply selling a part of the business is unlikely to
create a significant premium to the current trading price of the
stock.
On Tuesday, Skky Capital Corporation Limited
(“Skky”), requisitioned a shareholder meeting to remove the members
of the Special Committee and add two new directors. So now the
Management Group, with its takeover bid and through the actions of
Skky, and the Special Committee, each has a threat of
drastic action on the table. You’ll probably be able to postpone
the shareholder meeting until July, resulting in this mess
continuing for the next four months and causing untold damage to
Canaccord and its business. In order to avoid this scenario, I
strongly suggest that the Special Committee reach an agreement with
the Management Group in the near term on an improved bid. I would
expect that if both of you are creative and flexible, a price in
excess of $11.25 is achievable.
If an agreement is not reached and the Special
Committee ends up causing there to be no transaction, Crescendo
intends to support the new slate at the requisitioned meeting.
Yours truly,
Eric Rosenfeld
Canaccord Genuity (TSX:CF)
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