Fairfax Announces Preliminary Results of Substantial Issuer Bid
24 December 2021 - 11:30PM
Fairfax Financial Holdings Limited (“Fairfax” or the “Company”)
(TSX: FFH and FFH.U) announced today the preliminary results of its
substantial issuer bid initially announced on November 17, 2021
(the “Offer”), pursuant to which the Company offered to purchase
for cancellation a number of its subordinate voting shares
(“Shares”) for an aggregate purchase price not to exceed US$1.0
billion at a purchase price of not less than US$425.00 and not more
than US$500.00 per Share. The Offer expired at 5:00 p.m. (Toronto
time) on December 23, 2021.
In accordance with the terms and conditions of
the Offer, and based on the preliminary calculations from
Computershare Investor Services Inc. (the “Depositary”), as
depositary for the Offer, Fairfax expects to take up and purchase
for cancellation 2,000,000 Shares at a purchase price of US$500.00
per Share (the “Purchase Price”) under the Offer, representing an
aggregate purchase price of US$1.0 billion. The Shares expected to
be purchased under the Offer represent approximately 7.01% of the
total number of Fairfax’s issued and outstanding Shares and
multiple voting shares before giving effect to the Offer. As of
November 17, 2021, the date the Offer was announced, there were
26,986,170 Shares and 1,548,000 multiple voting shares issued and
outstanding. After giving effect to the Offer, Fairfax expects to
have 24,986,170 Shares and 1,548,000 multiple voting shares issued
and outstanding.
Based on preliminary results, 2,208,578 Shares
were validly tendered and were not withdrawn pursuant to the Offer
(including Shares tendered by notice of guaranteed delivery). As
the Offer was oversubscribed, it is expected that shareholders who
made auction tenders at or below US$500.00 per Share and purchase
price tenders will have the number of Shares purchased by Fairfax
prorated to approximately 90.4% of their successfully tendered
Shares following the determination of the final results of the
Offer (other than “odd lot” tenders, which are not subject to
proration).
The full details of the Offer are described in
the offer to purchase and issuer bid circular dated November 18,
2021, as well as the related letter of transmittal and notice of
guaranteed delivery, copies of which were filed and are available
on SEDAR at www.sedar.com and were also filed on a Schedule 13E-4F
with the U.S. Securities and Exchange Commission and made available
on EDGAR at www.sec.gov (the “Offer Documents”).
The number of Shares to be purchased under the
Offer, the Purchase Price and the proration factor referred to
above are preliminary, remain subject to verification by the
Depositary and assume that all Shares tendered through notice of
guaranteed delivery will be delivered within the two trading day
settlement period. Fairfax will announce the final results of the
Offer following completion of take-up of the Shares.
Not an Offer or Solicitation
This press release is for informational purposes
only and is neither an offer to purchase nor a solicitation of an
offer to sell any Shares. The solicitation and the offer to
purchase Shares by Fairfax was made pursuant to the Offer Documents
that Fairfax filed with the Canadian securities regulatory
authorities and the United States Securities and Exchange
Commission.
Fairfax is a holding company which, through its
subsidiaries, is primarily engaged in property and casualty
insurance and reinsurance and the associated investment
management.
For further
information, contact: |
John Varnell,
Vice President, Corporate Development at |
|
(416) 367-4941 |
Certain statements contained herein may
constitute forward-looking statements and are made pursuant to the
“safe harbour” provisions of applicable Canadian securities laws.
Particularly, statements about the Offer, including the actual
number of Shares to be taken up and paid for in connection with the
Offer, the purchase price, the proration factor, the number of
Shares and multiple voting shares expected to be issued and
outstanding after completion of the Offer, and statements regarding
future results, performance, achievements, prospects or
opportunities of the Company, are forward-looking statements. Such
forward-looking statements are subject to known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Fairfax to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include,
but are not limited to: reduction in net earnings if our loss
reserves are insufficient; underwriting losses on the risks we
insure that are higher or lower than expected; the occurrence of
catastrophic events with a frequency or severity exceeding our
estimates; changes in market variables, including interest rates,
foreign exchange rates, equity prices and credit spreads, which
could negatively affect our investment portfolio; risks associated
with the global pandemic caused by a novel strain of coronavirus
(“COVID-19”), and the related global reduction in commerce and
substantial downturns in stock markets worldwide; the cycles of the
insurance market and general economic conditions, which can
substantially influence our and our competitors’ premium rates and
capacity to write new business; insufficient reserves for asbestos,
environmental and other latent claims; exposure to credit risk in
the event our reinsurers fail to make payments to us under our
reinsurance arrangements; exposure to credit risk in the event our
insureds, insurance producers or reinsurance intermediaries fail to
remit premiums that are owed to us or failure by our insureds to
reimburse us for deductibles that are paid by us on their behalf;
our inability to maintain our long term debt ratings, the inability
of our subsidiaries to maintain financial or claims paying ability
ratings and the impact of a downgrade of such ratings on derivative
transactions that we or our subsidiaries have entered into; risks
associated with implementing our business strategies; the timing of
claims payments being sooner or the receipt of reinsurance
recoverables being later than anticipated by us; risks associated
with any use we may make of derivative instruments; the failure of
any hedging methods we may employ to achieve their desired risk
management objective; a decrease in the level of demand for
insurance or reinsurance products, or increased competition in the
insurance industry; the impact of emerging claim and coverage
issues or the failure of any of the loss limitation methods we
employ; our inability to access cash of our subsidiaries; our
inability to obtain required levels of capital on favourable terms,
if at all; the loss of key employees; our inability to obtain
reinsurance coverage in sufficient amounts, at reasonable prices or
on terms that adequately protect us; the passage of legislation
subjecting our businesses to additional adverse requirements,
supervision or regulation, including additional tax regulation, in
the United States, Canada or other jurisdictions in which we
operate; risks associated with government investigations of, and
litigation and negative publicity related to, insurance industry
practice or any other conduct; risks associated with political and
other developments in foreign jurisdictions in which we operate;
risks associated with legal or regulatory proceedings or
significant litigation; failures or security breaches of our
computer and data processing systems; the influence exercisable by
our significant shareholder; adverse fluctuations in foreign
currency exchange rates; our dependence on independent brokers over
whom we exercise little control; impairment of the carrying value
of our goodwill, indefinite-lived intangible assets or investments
in associates; our failure to realize deferred income tax assets;
technological or other change which adversely impacts demand, or
the premiums payable, for the insurance coverages we offer;
disruptions of our information technology systems; assessments and
shared market mechanisms which may adversely affect our insurance
subsidiaries; and adverse consequences to our business, our
investments and our personnel resulting from or related to the
COVID-19 pandemic. Additional risks and uncertainties are described
in our most recently issued Annual Report which is available at
www.fairfax.ca and in our Base Shelf Prospectus (under “Risk
Factors”) filed with the securities regulatory authorities in
Canada, which is available on SEDAR at www.sedar.com. Fairfax
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable
securities law.
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