Debt-heavy CI sold preferred shares that represent a 20-per-cent interest in its U.S. wealth management business to a group of investors that includes Bain Capital, Ares Management and an arm of the Abu Dhabi Investment Authority
paid a steep price to win a $1.34-billion backstop from institutional investors, and shares in the asset management company sold off Friday as investors figured out terms of the financing.in its U.S. wealth management business to a group of investors that includes Bain Capital, Ares Management and an arm of the Abu Dhabi Investment Authority. The company postponed previously announced plans to sell a portion of its U.S. subsidiary in an initial public offering.
In a regulatory filing Thursday, CI said that if a future IPO doesn’t meet certain conditions, including size, the company has guaranteed the buyers of the preferred shares a new, higher value for them. The buyers of the debt also have the right to force an IPO or sale of the U.S. wealth business within five years and nine months after the closing.
In a report published Friday, analyst Tom MacKinnon at BMO Capital Markets forecast that over next three to six years, CI shareholders could end up owning 55 to 60 per cent of the unit, down from their current 80 per cent holding. Mr. MacKinnon downgraded his outlook for the company. Spokespersons for CI did not respond Friday to requests for comment on the preferred share financing.
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