* CI independent shareholders to vote on extension of plan
* Scotiabank, CI's largest shareholder, not able to vote
* Bank has asked TSX to require CI to allow it to vote
* CI says will "vigorously defend" plan
By John McCrank
TORONTO, April 6 CI Financial (CIX.TO) said on
Wednesday it would "vigorously defend" its shareholder rights
plan and deemed "inaccurate" recent comments aimed at the fund
manager by Rick Waugh, chief executive of Bank of Nova Scotia,
CI's largest shareholder.
The plan is aimed at preventing a hostile takeover of the
independent wealth manager and prevents Scotiabank, which owns
just over 36 percent of CI, from selling a block of 20 percent
or more of CI shares.
Independent shareholders of CI will vote on a three-year
extension of the plan at the annual meeting this year.
Scotiabank, which is not an independent shareholder under the
terms of the plan, will not have a vote.
"One of the great things about publicly traded companies is
you get a shareholder vote," Scotiabank's Waugh told reporters
after the bank's annual meeting on Tuesday.
"That is, to me, a principle of property rights and the
right of vote, and I find it very strange where, just because
we happen to be a large shareholder, we are denied that
CI said it was not denying a fundamental right, but was
complying with the terms of the plan that its shareholders
adopted in 2008, which Scotiabank voted for at the time, and
the Toronto Stock Exchange approved.
Now Scotiabank, Canada's No. 3 lender, has asked the
Toronto Stock Exchange to require CI to give the bank the right
to vote on the continuation of the plan.
CI, which has around C$98.9 billion ($103 billion) in
assets under management, said it "strongly disagrees" with
Scotiabank's position and is also in discussions with the
Toronto Stock Exchange.
"We are simply adhering to the terms of an agreement that
has been approved by shareholders," CI Chief Executive Stephen
MacPhail said in a release. "Protecting the rights of all of
our shareholders is of paramount concern to CI."
Scotiabank bought its stake in CI from Sun Life (SLF.TO) in
2008 and many analysts expected the bank to eventually buy up
the rest of the firm as it looked to increase its footprint in
the wealth management sector.
But Scotiabank surprised market watchers in November when
it bought the 82 percent of CI rival DundeeWealth DW_pa.TO
that it didn't already own for C$2.3 billion. DundeeWealth
manages about C$84 billion in assets.
Scotiabank is now seen as a likely seller of CI.
CI said Scotiabank can sell its stake under the rights
plan, as long as it's an offer made to all shareholders, and it
is not a private sale of a block of 20 percent or more.
"The plan does not preclude a takeover of the company as
long as the transaction is fair and in the best interests of
the company," CI said.
Waugh has been coy on Scotiabank's plans for its CI stake,
saying on Tuesday that CI was still an important investment for
the bank, but right now its focus is on DundeeWealth.
"We'll learn as that goes along and we'll see how it's
applicable one way or the other with CI," he said.
(Reporting by John McCrank; editing by Rob Wilson)