Fairfax Financial Holdings Limited is taking one of Canada’s top wine producers private. Andrew Peller Limited has agreed to be acquired by a newly formed Fairfax subsidiary in an all-cash deal that values the Grimsby, Ontario-based winemaker at roughly $397 million on a fully diluted equity basis and about $579 million on an enterprise value basis.
The offer hands shareholders a steep premium after a prolonged slide in the company's stock. Fairfax will pay $8.00 per Class A non-voting share and $12.00 per Class B voting share. As of June 12, the last trading day before the announcement, those prices marked the highest levels for each class in more than four years. The Class A consideration represents a 41 percent premium to the closing price and 42 percent to the 20-day volume weighted average price, while the Class B consideration represents premiums of 70 percent and 66 percent on the same measures.
Central to the transaction is the founding family's decision to stay in. Rather than cash out, John Peller and certain affiliates have agreed to roll over all 5,246,517 Class A shares and 1,994,212 Class B shares they control, representing roughly 15 percent of the Class A and 25 percent of the Class B shares, into the acquiring entity, aligning the family with Fairfax under private ownership. The company's two largest shareholders, along with directors and senior officers holding about 20 percent of the Class A and 75 percent of the Class B shares, have signed voting support agreements backing the deal, which will proceed by plan of arrangement under the Canada Business Corporations Act and carries no financing condition.
A special committee of independent directors and the full board unanimously approved the transaction, with interested directors abstaining, after weighing two fairness opinions. Origin Merchant Partners, which also served as independent valuator, pegged the fair market value of the Class A shares at $7.21 to $10.27 and the Class B shares at $9.95 to $14.18, and both Origin and Canaccord Genuity Corp. opined that the consideration was fair. The agreement carries a $12 million termination fee, about 3 percent of equity value, matched by a $12 million reverse termination fee, plus capped expense reimbursement of up to $750,000. Day-to-day, little is expected to change at the top, as Paul Dubkowski stays on as chief executive officer and Renee Cauchi as chief financial officer, with the rest of the leadership team expected to remain.
"This agreement represents a compelling outcome for our shareholders, delivering immediate value and certainty while reflecting the strength of Andrew Peller's portfolio and market position," Andrew Peller CEO Paul Dubkowski said in a press release. "Importantly, we believe Fairfax is the right long-term partner for the Company. Their investment approach, financial strength and long-term orientation provide a strong foundation to continue building our business and supporting the ongoing growth of the Canadian wine industry. With over 65 years of heritage, Andrew Peller has remained focused on quality and innovation, and we are confident that legacy will continue under Fairfax's ownership."
"We are pleased to partner with John Peller to acquire Andrew Peller Limited, led by its Chief Executive Officer, Paul Dubkowski. The Peller family has been a leading name in wine in Canada for generations, and we look forward to working with the entire Peller team to continue the development and success of this great Canadian company over the long term," Fairfax chairperson and CEO Prem Watsa added.
On the legal side, Bennett Jones LLP is acting as independent legal advisor to the special committee and the board of Andrew Peller, with a team that includes Curtis A. Cusinato, Kristopher R. Hanc, Bronwynn Shaw, Yohanna Laurensia, David Storey, and Michelle Galati (Mergers & Acquisitions).
Torys LLP is acting as legal advisor to Fairfax, with a team that includes Janan Paskaran, Jennifer Baugh, and Aleem Merali (corporate/M&A); Teresa Reguly and Chantalle Briggs (food regulatory); Jennifer Lennon (employment compensation); Andrew Gray (securities regulatory); and John Tobin and Benjamin Mann (tax).
Canaccord Genuity Corp. acted as financial advisor to the special committee, and Origin Merchant Partners acted as financial advisor and independent valuator to the special committee. Avington International Markets acted as financial advisor to the rollover shareholders, with Norton Rose Fulbright Canada LLP acting as their legal advisor, and Loopstra Nixon LLP acted as legal advisor to Peller Family Enterprises Inc.
To proceed, the deal needs approval from at least two-thirds of the votes cast by each share class, voting separately, plus a majority of the votes cast by each class excluding the rollover shareholders and others carved out under Multilateral Instrument 61-101, alongside court and regulatory clearances. A close is expected in the third quarter of 2026, after which Andrew Peller's shares would be delisted from the TSX and the company would cease to be a reporting issuer across Canada.
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