Canadian Western Bank took into account the results of the strategic options review conducted last year by Laurentian Bank before deciding to devote all its energies to the negotiations leading to the sale agreement with National Bank unveiled last month.
At a meeting of the board of directors held last spring to take stock of the National Bank’s interest, many avenues were discussed, including the potential interest of other counterparties.
The solicitation circular filed late Friday with regulatory authorities reveals that the board of Canadian Western Bank has determined, however, that it was unlikely that a third party would be willing and able to propose a transaction more favourable to the organization’s shareholders than National Bank.
It is specified that the board of the Canadian Western Bank took into account, in particular, public information surrounding the results of an in-depth strategic review process conducted by another Canadian bank of similar size which was leaked to the media before being completed in 2023 without resulting in an executable transaction.
Without specifically naming the Laurentian Bank, the description offered leaves little doubt as to the reference.
Laurentian, whose future fueled speculation in the media last summer, indicated in September that the review of its strategic options had ended by excluding the potential sale of the bank.
The board of directors of Canadian Western Bank said it was concerned about the increased risk of leaks in the context of a strategic review process and the negative impact that could result from it, and that these risks could be more appropriately mitigated by pursuing a transaction with National Bank.
Enhanced offers
Before reaching an agreement with the directors of the Canadian Western Bank last month, the National Bank had to make several approaches and several offers.
The first proposal was made in November 2022. It valued Canadian Western Bank at $40 per share. An improved proposal presented last January valued Canadian Western Bank at $47 per share.
A revised proposal valuing the Edmonton bank at $50 per share followed over the winter, before an agreement was announced in June valuing Canadian Western Bank at $52 per share.
If the deal receives the necessary approvals, it would be the largest acquisition in National Bank’s history. The transaction is to be carried out through a share exchange valuing Canadian Western Bank at about $5 billion.
Canadian Western Bank shareholders are being called to a special meeting on September 3 in Edmonton to vote on the transaction. In addition to obtaining regulatory approval, the transaction must be approved by at least two-thirds of the votes cast by Canadian Western Bank shareholders to proceed.