Canaccord Genuity eyes RF Capital Group

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This article was published 16/03/2021 (1704 days ago), so information in it may no longer be current.

Only months after completing a complicated transaction to rebrand and restructure the wealth management firm that’s now called Richardson Wealth, the company is now the target of an unwanted takeover bid.

Canaccord Genuity Group Inc. has made a takeover offer for RF Capital Group — the publicly traded parent company of Richardson Wealth — that’s worth about $367 million.

Canaccord has its own wealth management business and acquiring Richardson Wealth would combine two of the largest independent wealth management businesses in Canada.

But the board of RF Capital Group is not impressed and does not appreciate the advances Canaccord is making.

Neither does Richardson Financial Group, the Winnipeg Richardson family’s financial services arm, which owns 44 per cent of RF Capital.

Canaccord said RF Capital’s board dismissed the proposal earlier this month without reason and that representatives of Richardson Financial Group Ltd., rejected an invitation to discuss the offer.

Canaccord Genuity CEO Dan Daviau says he believes the plan would provide superior value for RF Capital shareholders, and that Richardson Wealth investment advisers would benefit from the scale, stability and growth potential of his firm.

Under the proposal, Canaccord Genuity is offering $2.30 per share in cash or Canaccord Genuity shares for each RF Capital share. In trading on the Toronto Stock Exchange, RF Capital shares were up 20 cents at $1.96.

Both RF Capital and Richardson Financial publicly acknowledged and rejected the offer.

A statement from RF Capital said, “RF Capital advises shareholders that its board declined to engage with Canaccord, having unanimously concluded that the proposal was not in the best interest of the company’s shareholders, advisors, clients and other stakeholders in light of the considerable opportunities for Richardson Wealth in the fast-growing wealth management industry.”

Sandy Riley, president and CEO of Richardson Financial Group, effectively said the same thing.

“We believe that RF Capital is embarked on a strategy that will generate far more shareholder value than a transaction with Canaccord would. RFG’s shares are not for sale because we believe in the long-term vision for RF Capital and Richardson Wealth,” he said in a public statement.

In an memo to Richardson Wealth employees that the Free Press obtained, Riley said that he believes Richardson Wealth is already the premier independent wealth management business in the country and it will grow stronger over the long term.

“That’s why we agreed to put the Richardson name on the door,” Riley said in the memo. “We at RFG are excited for what the future holds, and confident that the team at RF Capital and Richardson Wealth is the right team to deliver. We’re behind you all the way.”

In October the former Richardson GMP concluded a lengthy and complicated restructuring — which included selling off its capital markets business — to form Richardson Wealth, which has $31.4 billion in assets under administration (as at Feb. 28, 2021) and 19 offices across the country.

Canaccord Genuity has about $88 billion of assets under administration.

In addition to Richardson Wealth RF Capital is also the parent company of RF Securities Clearing, which provides broker services to Richardson Wealth and others.

— with files from The Canadian Press

martin.cash@freepress.mb.ca