Scotiabank Acquires Dundeewealth

On February 1, 2011, Scotiabank announced the successful completion of its acquisition of DundeeWealth Inc. As a result of this acquisition, Scotiabank becomes the fifth-largest mutual fund provider in Canada and the third largest among the country's leading banks, based on figures reported by the Investment Funds Institute of Canada. Prior to the transaction, Scotiabank owned approximately 18 per cent of DundeeWealth. The transaction was effected by way of a takeover bid for all the outstanding shares of DundeeWealth.

On the day that the announcement of the offer was made, the value of the transaction to DundeeWealth shareholders was $2.3 billion, representing an enterprise value for DundeeWealth of approximately $3.2 billion. For each DundeeWealth common share, Scotiabank offered 0.2497 of a Scotiabank common share and, at the election of the shareholder, either $5 in cash or 0.2 of a $25 principal amount 3.7 per cent five year rate reset Scotiabank preferred share. DundeeWealth shareholders also received a special distribution of $2 per share in cash as well as an interest in Dundee Capital Markets Inc., which DundeeWealth distributed to its shareholders in connection with the transaction.

Dundee Corporation, which owned approximately 48 per cent of DundeeWealth, Ned Goodman, controlling shareholder of Dundee Corporation, and David Goodman, DundeeWealth President and CEO, entered into irrevocable lock-up agreements with Scotiabank. The transaction was also supported by DundeeWealth, which established a special committee of independent directors to review the transaction.

Scotiabank was represented in-house by a team led by Deborah Alexander, Executive Vice-President, General Counsel & Secretary and Anita Mackey, Vice-President & Associate General Counsel and by a team from Torys LLP that included Richard Balfour, Michael Siltala, Cornell Wright, Jackie Taitz, James Miller, Raegan Kennedy, Adrienne DiPaolo, Gabrielle Mandowsky and Christian Thatcher (corporate); Andrew Beck and Heding Yang (US securities); Corrado Cardarelli and Richard Johnson (tax); Christina Medland (employment); Omar Wakil, Joseph Romagnoli, Craig Pell and Sue-Anne Fox (competition); James Tory and Andrew Gray (litigation); Eric Boehm (intellectual property); Christine Vogelesang and Dawn Scott (regulatory) and Blair Keefe and Sunny Sodhi (banking).

DundeeWealth Inc. was advised by Fasken Martineau DuMoulin LLP with a team led by Jonathan Levin and including Daniel Batista, Krisztián Tóth, Brad Freelan, Jessica Catton, Kelly McTavish and Michael Shour (securities); Doug H. Scott, Martin Fisher-Haydis, Kevin Clinton and Laura Fetter (corporate); Garth Foster, Gina Yee, Andrew Teehan and Mable Lam (regulatory); William Bies and Christopher Steeves (tax); Anthony Baldanza and Mark Magro (competition); Armand Benitah (intellectual property); Andrew Nunes (IT/transition services agreements) and Brian Smeenk and Richard Johnston (employment and equity incentive plans). DundeeWealth's Special Committee of independent directors was represented by a team from McMillan LLP that included Sean Farrell and Stewart Ash (corporate). Dundee Corporation was represented by a team from Stikeman Elliott LLP that included Marvin Yontef, Elizabeth Breen, Ivan Grbešiæ and Jeremy Ehrlich (M&A) and Susan Hutton (competition).