NU Online News Service, Feb. 17, 6:34 p.m. – Great-West Lifeco Inc., Winnipeg, Manitoba, has come to the rescue of Canada Life Financial Corp., Toronto, with a solicited takeover offer that has a value of about $4.8 billion in U.S. currency.
The deal price would include Great-West common stock, Great-West preferred shares and up to $2.9 billion in cash, the companies say.
Power Financial Corp., Great-West's parent company, has agreed to provide at least $525 million of the cash, Great-West says.
Power Financial and Great-West are both units of Power Corporation of America, Montreal.
Canada Life has been trying for weeks to fend off an unsolicited, $4.1 billion takeover offer from Manulife Financial Corp., Toronto.
Manulife has insisted that its offer is a good deal for Canada Life shareholders, given the current price of Canada Life shares, but Canada Life says the Manulife offer is inadequate because it is priced at valuation multiples substantially below those derived from comparable transactions and fails to reflect the "unique value and growth prospects of Canada Life."
Great-West, which owns London Life Insurance Company in Canada as well as Great-West operations in Canada and Great-West Life & Annuity in the United States, says success at acquiring Canada Life would give it a leading market share in all key Canadian life insurance market segments.
