Northbridge Financial Completes IPO

On May 28, 2003, Northbridge Financial Corporation completed an initial public offering of 13.4 million common shares at $15 per share for gross proceeds of $201 million. The common shares were also sold on a private placement basis to certain qualified U.S. investors. BMO Nesbitt Burns Inc. was book-runner and, along with Scotia Capital Inc., co-led the syndicate of underwriters, which included CIBC World Markets Inc., RBC Dominion Securities Inc. and TD Securities Inc.

Prior to the completion of the offering, Northbridge completed a reorganization, pursuant to which Fairfax Financial Holdings Limited transferred all the outstanding shares of its Canadian insurance subsidiaries (Lombard Canada Ltd., Commonwealth Insurance Company, Markel Insurance Company of Canada and Federated Holdings of Canada Ltd.) to Northbridge in return for the issuance to Fairfax of approximately 29.7 million common shares and promissory notes in the aggregate principal amount of $170 million. As part of the reorganization, Fairfax also indirectly transferred to Northbridge common shares and convertible debentures of Hub International Limited in exchange for 7.7 million common shares of Northbridge. $170 million of the net proceeds from the offering will be used to repay the promissory notes in their entirety. The remaining proceeds will be used for general corporate purposes and to contribute to the funding of potential future acquisitions. Following the reorganization, Fairfax holds, directly and indirectly, 73.6 per cent of the company's common shares.

Northbridge and Fairfax were represented by Torys LLP in Toronto and New York, with a team led by David Chaikof and including John Emanoilidis, Ryan Barry and Nirari Sheeno (corporate/securities), Blair Keefe (regulatory), Cameron Koziskie (commercial), Jim Welkoff (tax) and Andy Beck (U.S. securities).

BMO Nesbitt Burns, Scotia Capital and the other underwriters were represented by Osler, Hoskin & Harcourt LLP, with a team that included Mark DesLauriers, Alexis Gosselin, Katy Waugh and In Ha Jang (corporate/securities), Hemant Tilak and Alex Pankratz (tax) and John Jason (regulatory).