Readers are referred to the section "Forward-Looking Statements" at the end of this release. All figures are expressed in
Canadian dollars.
MONTRÉAL, March 8, 2019 /CNW Telbec/ - Power Financial Corporation ("Power Financial", the
"Corporation" or "PFC") (TSX: PWF) today announced the terms of its previously announced substantial issuer bid (the "PFC
Offer") to repurchase for cancellation up to $1.65 billion of its common shares (the "Shares"). The
PFC Offer will commence today and expire at 11:00 a.m. (Eastern Time) on April 13, 2019, unless extended or withdrawn.
Great-West Lifeco ("Great-West") earlier today announced the terms of its previously announced
substantial issuer bid (the "Great-West Offer") to return capital to shareholders while maintaining significant excess capital to
fund strategic investments, including acquisitions, to drive growth and profitability.
Power Financial, as previously disclosed, intends to support Great-West through its participation in
the Great-West Offer and expects to use the proceeds from its participation in the Great-West Offer to fund, along with the
Corporation's available resources, the PFC Offer. The PFC Offer facilitates the repurchase of PFC shares at currently attractive
valuations while maintaining a strong capital position to fund future growth opportunities.
The PFC Offer
The PFC Offer is being made by way of a "modified Dutch auction", which will allow shareholders who choose to participate in
the PFC Offer to individually select the price, within a price range of not less than $29.00 per
Share and not more than $34.00 per Share (in increments of $0.10 per
Share), at which they are willing to sell their Shares. Upon expiry of the PFC Offer, the Corporation will determine the lowest
purchase price (which will not be more than $34.00 per Share and not less than $29.00 per Share) that will allow it to purchase the maximum number of Shares properly tendered to the PFC
Offer, and not properly withdrawn, having an aggregate purchase price not exceeding $1.65
billion.
The Corporation expects to fund the PFC Offer from the expected receipt of proceeds from its participation in the Great-West
Offer and the Corporation's available resources. In the event, and to the extent, that such resources are insufficient to fund
the PFC Offer, the Corporation has also executed a commitment letter with a Canadian chartered bank to provide for a
non-revolving credit facility to fund, in full, the payment for the Shares it has offered to acquire under the PFC Offer.
Shareholders who wish to participate in the PFC Offer will be able to do so through (i) auction tenders in which they will
specify the number of Shares being tendered at a specific price per Share; (ii) purchase price tenders in which they will
agree to have a specified number of Shares purchased at the purchase price to be determined pursuant to the auction and have
their Shares considered as having been tendered at the minimum price of $29.00 for the purposes of
determining the purchase price; or (iii) proportionate tenders in which they will agree to sell, at the purchase price to be
determined pursuant to the auction, a number of Shares that will result in them maintaining their proportionate
Share ownership in the Corporation following completion of the PFC Offer. Shareholders who validly deposit Shares
without specifying the method in which they are tendering their Shares will be deemed to have made a purchase price tender.
If, after taking into consideration the proportionate tenders, Shares with an aggregate purchase price of more than
$1.65 billion are properly tendered and not properly withdrawn, the Corporation will purchase
the Shares on a pro rata basis after giving effect to proportionate tenders and "odd lot" tenders (of shareholders beneficially
owning fewer than 100 Shares), which will not be subject to proration. All Shares tendered at or below the finally
determined purchase price will be purchased, subject to proration, at the same purchase price determined pursuant to the terms of
the PFC Offer. Shares that are not purchased, including Shares tendered pursuant to auction tenders at prices above the purchase
price, will be returned to shareholders.
The Corporation's principal shareholder, Power Corporation of Canada ("Power Corporation"),
beneficially owns, as of March 5, 2019, 467,839,296 Shares, representing 65.5% of the issued and
outstanding Shares. Power Corporation has informed the Corporation that it intends to support the Corporation through its
participation in the PFC Offer by tendering a significant portion of its Shares on a proportionate basis and all remaining
tendered Shares on a non-proportionate basis. Consequently, Power Corporation expects its ownership in Power Financial will be
marginally reduced.
Power Financial's directors and officers have informed the Corporation that they do not plan to tender any Shares pursuant to
the PFC Offer.
Additional Information
The PFC Offer will be for up to a maximum of 56,896,551 Shares or approximately 7.97% of the total number of issued and
outstanding Shares on a non-diluted basis (based on full participation and a purchase price equal to the minimum purchase price
per Share and 714,096,479 Shares issued and outstanding as of March 5, 2019).
The PFC Offer is optional for all shareholders, who are free to choose whether to participate, how many Shares to tender and,
in the case of auction tenders, at what price to tender within the specified range. Any shareholders who do not deposit their
Shares (or whose Shares are not repurchased under the PFC Offer) will realize a proportionate increase in their equity interest
in the Corporation, to the extent that Shares are purchased under the PFC Offer.
The PFC Offer is not conditional upon any minimum number of Shares being tendered but is subject to various other conditions
disclosed in the formal offer to purchase and issuer bid circular. Power Financial reserves the right, subject to applicable
laws, to withdraw or amend the PFC Offer, if certain events occur. The PFC Offer is expected to remain open for acceptance until
11:00 a.m. (Eastern Time) on April 13, 2019, unless extended or
withdrawn.
Details of the PFC Offer, including instructions for tendering Shares, will be included in the formal offer to purchase and
issuer bid circular, letter of transmittal, notice of guaranteed delivery and other related documents (the "Offer Documents").
The Offer Documents are expected to be mailed to shareholders, filed with applicable Canadian securities regulatory authorities
and made available without charge on SEDAR at www.sedar.com,
and posted on the Corporation's website at www.PowerFinancial.com, today.
Power Financial has engaged BMO Capital Markets to act as financial advisor and dealer manager for the PFC Offer. Power
Financial has also engaged Computershare Trust Company of Canada to act as depositary for the
PFC Offer. Any questions or requests for information regarding the PFC Offer may also be directed to the dealer manager or the
depositary.
This news release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer
to sell Shares. The solicitation and the offer to buy Shares will only be made pursuant to the Offer Documents filed with the
Canadian securities regulatory authorities. The PFC Offer will not be made to, nor will tenders be accepted from or on behalf of,
holders of Shares in any jurisdiction in which the making or acceptance of offers to sell Shares would not be in compliance with
the laws of that jurisdiction. None of Power Financial, its Board of Directors, the dealer manager or the depositary makes any
recommendation to shareholders as to whether to tender or refrain from tendering any or all of their Shares pursuant to the PFC
Offer or the purchase price or prices at which shareholders may choose to tender Shares. Shareholders are strongly urged to read
the Offer Documents carefully and to consult with their financial, tax and legal advisors prior to making any decision with
respect to the PFC Offer.
About Power Financial
Power Financial Corporation is a diversified international management and holding company with interests substantially in the
financial services sector in Canada, the United States and
Europe. It also has significant holdings in global industrial and services companies based in
Europe. Power Financial Corporation is a member of the Power Corporation Group of
Companies. To learn more, visit www.PowerFinancial.com.
Forward-Looking Statements
Certain statements in this news release, other than statements of historical fact, are forward-looking statements based on
certain assumptions and reflect the Corporation's current expectations, or with respect to disclosure regarding Power Corporation
and Great-West, reflect their disclosed current expectations. Forward-looking statements are provided to present information
about management's current expectations and plans relating to the future and the reader is cautioned that such statements may not
be appropriate for other purposes. These statements include, without limitation, statements regarding the strategies and outlook
of the Corporation, as well as the terms of the PFC Offer, including the maximum dollar value of the Shares the Corporation may
purchase under the PFC Offer, the timing for launch and completion of the PFC Offer, the sources and availability of funding for
the PFC Offer, and the effect of the financing of the PFC Offer on the Corporation's future operations and financial
condition.
By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give
rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that
assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors,
many of which are beyond the Corporation's and its subsidiaries' control, affect the operations, performance and results of the
Corporation and its subsidiaries and their businesses, and could cause actual results to differ materially from current
expectations of estimated or anticipated events or results. These factors include, but are not limited to: the impact or
unanticipated impact of general economic, political and market factors in North America and
internationally, fluctuations in interest rates, inflation and foreign exchange rates, monetary policies, business investment and
the health of local and global equity and capital markets, management of market liquidity and funding risks, risks related to
investments in private companies and illiquid securities, risks associated with financial instruments, changes in accounting
policies and methods used to report financial condition (including uncertainties associated with significant judgments, estimates
and assumptions), the effect of applying future accounting changes, business competition, operational and reputational risks,
technological changes, cybersecurity risks, changes in government regulation and legislation, changes in tax laws, unexpected
judicial or regulatory proceedings, catastrophic events, the Corporation's and its subsidiaries' ability to complete strategic
transactions, integrate acquisitions and implement other growth strategies, the PFC Offer not occurring as expected, including
failure of any condition to the PFC Offer, the Corporation's inability to finance the PFC Offer in the intended manner (including
due to any failure to consummate the credit agreement prior to the expiration of the PFC Offer or the unavailability of
sufficient funds from the net proceeds of the Great-West Offer, the Corporation's other resources and/or the Corporation's credit
facility to fund the PFC Offer, and any inability to obtain any required regulatory approvals or further exemptive relief), the
extent to which shareholders elect to tender their Shares under the PFC Offer, the Corporation having sufficient financial
resources and working capital following completion of the PFC Offer, the market for the Corporation's Shares at the completion of
the PFC Offer being materially less liquid than the market that exists at the time the PFC Offer is commenced, the PFC Offer
launching and/or being completed on time, and the Corporation's and its subsidiaries' success in anticipating and managing the
foregoing factors.
The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue
reliance on forward-looking statements. Information contained in forward-looking statements is based upon certain material
assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of
historical trends, current conditions and expected future developments, as well as other considerations that are believed to be
appropriate in the circumstances, including that the list of factors in the previous paragraph, collectively, are not expected to
have a material impact on the Corporation and its subsidiaries. While the Corporation considers these assumptions to be
reasonable based on information currently available to management, they may prove to be incorrect.
Other than as specifically required by applicable Canadian law, the Corporation undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the
occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
Additional information about the risks and uncertainties of the Corporation's business and material factors or assumptions on
which information contained in forward-looking statements is based is provided in its disclosure materials, including its most
recent Management's Discussion and Analysis and Annual Information Form, filed with the securities regulatory authorities in
Canada and available at www.sedar.com.
SOURCE Power Financial Corporation
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