We'll I was correct with the merger happening!
NATIONAL BANK OF CANADA ("NA-TMV") LEVESQUE BEAUBIEN GEOFFRION INC ("T63-T;V63-V;C63-Y;M63-M") FIRST MARATHON INC ("FMS.A,FMS.C-TMV") - Levesque Beaubien Geoffrion and First Marathon will Merge into - Fully Integrated National Firm
National Bank of Canada, Levesque Beaubien Geoffrion Inc. and First Marathon Inc. announced that First Marathon Inc. has agreed to a proposed plan of arrangement whereby the National Bank of Canada would acquire all of the shares of First Marathon at a price of $26 per share. First Marathon has approximately 27.4 million shares outstanding on a fully-diluted basis.
Under the terms of the agreement First Marathon shareholders will have the option of electing to receive either $26 in cash or 1.3 common shares of National Bank for each Class A non-voting share or Class C voting share they hold, subject to a maximum aggregate of 16.25 million common shares of National Bank being issued and a maximum aggregate cash payment of $387.3 million.
The businesses of First Marathon Inc., including its principal operating subsidiary First Marathon Securities Limited, will be merged with those of Levesque Beaubien Geoffrion Inc., to form a new national investment firm. Pierre Brunet, currently President and Chief Executive Officer of Levesque Beaubien Geoffrion Inc., and Lawrence Bloomberg, Chairman and Chief Executive Officer of First Marathon Inc., will be Co-Chairmen and Co-Chief Executive Officers of the new firm.
The merged company will be structured into two major operating entities: a national retail firm and a national wholesale firm, both of which will have large operating units in both Montreal and Toronto. Germain Carriere of Levesque Beaubien Geoffrion Inc. will be President and Chief Operating Officer responsible for the extensive retail operations, and will be based in Montreal. Kym Anthony of First Marathon Inc. will be President and Chief Operating Officer of the wholesale firm, and will be based in Toronto. The wholesale operations will encompass institutional brokerage, fixed income, investment banking, derivatives, merchant banking, credit origination and the Correspondent Network.
The merged firm will have annual revenues of approximately $600 million, excluding non-core activities, and a capital base of about $500 million.
"The acquisition is in line with the National Bank's stated objective of increasing our revenues outside of Quebec," said Andre Berard, Chairman and Chief Executive Officer of National Bank of Canada. "It also reinforces the National Bank's efforts to expand the range of client services that we offer in Quebec and across Canada."
"This is a strategic transaction that benefits both parties," said Jean Turmel, President, Financial Markets, Treasury and Investment Bank, of the National Bank. "The transaction will enable the National Bank to reinforce its capabilities and its network in the key areas of corporate finance and institutional brokerage."
Lawrence Bloomberg of First Marathon added that "this transaction will create a strong platform from which we will together offer a broader range of investment banking, investment management, and other financial products to our many clients. The transaction not only maximizes value for First Marathon's shareholders but also provides enhanced career opportunities for many of our employees. We are obviously extremely excited to be joining with an organization whose capabilities and strengths complement and extend our core strengths so well."
"As well, our cultures are both performance driven, team oriented, and based on a deep and abiding commitment to client service," he continued. "Put simply, National Bank and Levesque Beaubien Geoffrion are the right partners for us at the right time."
Pierre Brunet of Levesque Beaubien Geoffrion stated for his part that "we believe that the merged investment firm will generate significant additional revenue, by providing existing clients of the merged firms with an expanded range of services, and from the merged firm's enhanced ability to attract new clients. The new firm will have the scale, the product and distribution breadth, and the capital and human resources to play a leading role in Canadian capital markets. The merging of the two firms results in a great fit with significant synergistic benefits."
The board of directors of First Marathon Inc. has unanimously recommended approval of the plan of arrangement as being in the best interests of First Marathon, after the receipt of a favourable fairness opinion on the transaction from Deutsche Bank Securities Inc. The plan was also approved by the Board of directors of National Bank of Canada.
Certain senior executives of First Marathon Inc., including Messrs. Bloomberg and Anthony, have entered into support and employment agreements, which commit them, among other things, to vote their shares in favor of the proposed transaction.
The proposed transaction is subject to the approval of each class of First Marathon shareholders, voting separately at a special meeting of shareholders, and is also subject to the receipt of regulatory approvals, including the Office of the Superintendent of Financial Institutions. The transaction is expected to close in the third quarter of 1999.
First Marathon has agreed not to solicit other offers and to pay a break fee of $30 million if its directors withdraw their endorsement of the arrangement or approve or recommend another proposal, or in certain other circumstances.
With some 570 employees, First Marathon Inc. is a Canadian company that provides a range of financial services to corporations, financial institutions, and individual investors. Its principal operating subsidiary is First Marathon Securities Limited. First Marathon's businesses include securities underwriting, distribution, and trading; merger and acquisition and other advisory services; merchant banking and investing as principal; securities and mortgage banking; and securities execution, clearing, and custodial services for third parties. The shares of First Marathon Inc. are listed on The Toronto Stock Exchange, the Montreal Exchange, and the Vancouver Stock Exchange.
The National Bank of Canada, founded in 1859, is an integrated financial group whose mission is to provide comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its clients elsewhere in the world. Ranking sixth among Canada's chartered banks, National Bank is the leading banking institution in Quebec and the bank of choice for independent businesses. It has branches in every province of Canada. Through its representative offices, subsidiaries and joint ventures, the National Bank is also present in the United States, Europe and elsewhere in the world.
Founded in 1902, Levesque Beaubien Geoffrion is the number-one brokerage firm in Quebec and seventh in Canada, with over 2,200 employees. The firm is active in every major Canadian city, in New York and in Europe. Its principal activities include individual investor services, institutional services, as well as government and corporate finance. With more than 750 investment advisors, Levesque Beaubien manages assets of more than $25 billion on behalf of its clients, and is a recognized leader in Canadian, provincial, municipal and corporate bond markets.
This news release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in any jurisdiction. TEL: (514) 394-6990
Jocelin Dumas, National Bank of Canada TEL: (416) 869-8047
F. Michael Walsh, First Marathon Inc.
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