Mackenzie take-over rumoured

Mackenzie is up about 13% at midday on huge volumes of 2.2 million shares. Mackenzie opened at $17.35 this morning, with trading picking up soon after the open on a flurry of buy orders through TD Waterhouse. National Bank Financial and RBC Dominion Securities crossed a couple of blocks early on.

Then just before 10:00 ET, DS crossed 100,000 shares at $18. Minutes later Griffiths McBurney crossed a similar size block at the same price and trading has been fast and furious all morning, with some decent-sized crosses by BMO Nesbitt Burns and CIBC World Markets.

Griffiths though has been crossing 100,000 and 200,000 share blocks all morning. At midday it was responsible for 1.07 million shares bought and 1.05 million shares sold at
an average price of $18.55.

Mackenzie is seen as an attractive takeover target because it has been comparatively successful while much of the mutual fund industry has faltered. It has been one of the more strategically innovative firms. It also makes a ripe takeover target because it is not tightly controlled by a small group of shareholders like a number of fund companies are.

Although there is little more than gossip to suggest that CI is a suitor, the firm has been very successful over the past year and is one of the few financial firms to receive any stock market interest. Last fall CI bought rival BPI Financial Corp. and it has been on a winning streak ever since. It is one of the few firms with any deal currency in the form of its own stock, which has run up from $7.72, on a split-adjusted basis, to $20 this year. Today it is up just 10¢ to $18.70 on 49,600 shares.

Also CI basically sees itself as a manager of managers, so the possibility of overlap between its existing product lines and those of a takeover target are not as problematic as they may be at a company that is promoting a solitary brand.

C.I. chief executive Bill Holland refuses to comment specifically on the Mackenzie rumour, except to say that C.I. is looking to acquire other Canadian mutual fund companies in the “near future”, and that any company with “more than a few billion in assets makes sense. And there’s no upper
limit to that.”

In resonse to market activity Mackenzie has issued a release stating, “Mackenzie has no knowledge of any material event that may be affecting its business or its share price.”

Griffiths crossed a 550,000 share block at 13:49 at an intra-day high of $19.60, trading has since slowed and the price has pulled back to $18.50.