(February 16 – 09:20 ET) – Investors Group Inc. has mailed its $4.149 billion offer to shareholders of Mackenzie Financial Corp.

Shareholders of Mackenzie can elect to receive $30 cash, 1.2 common shares of Investors Group, or a combination of cash and shares.

Mackenzie’s board has determined unanimously that the offer is fair to the Mackenzie shareholders and is in the best interests of Mackenzie. A directors’ circular containing the board’s recommendation is to be mailed shortly, the company says.

The offer is conditional upon at least 66 2/3% of the shares being tendered. It will expire on April 17.

“We are excited about this offer to Mackenzie shareholders,” said Sandy Riley, president and CEO of Investors. “This is a solidly financed offer that brings together two of Canada’s leading financial services organizations to create a dominant force in the industry. Our goal is to build on the many advantages and strengths.”

IG says if the deal goes ahead, it may merge Mackenzie and some of its subsidiaries with IG subsidiaries. However, it is IG’s current intention to cause the mutual fund development, investment, distribution and sales operations of Mackenzie to continue to operate separately.

IG says it will examine opportunities to achieve synergies and cost reductions in areas of administration and services. It is intended that Mackenzie retain the Mackenzie families of mutual funds and other investment products and continue to develop, market, distribute and sell the Mackenzie families of mutual funds and other investment products separately.

IG will fund the cash portion of the deal with $230 million from Great-West Life, $138.3 million from Power, and $550 million from Mackenzie. The remaining $1.919 billion will come from a senior credit facility of up to $2.443 billion from Bank of Montreal. BMO Nesbitt Burns is acting as IG’s advisor on the deal.

There are no arrangements with Mackenzie’s senior officers regarding retention. There is also no mention of how the ownership of the shares in the combined companies will be resolved.
-IE Staff