* Shares climb $3.19 to C$30 on realty spinoff
* CEO said market was undervaluing shares
* Management to remain in place
TORONTO, Dec 14 Shares of Dundee Corp
soared as much as 14 percent on Friday after the asset
management company said it would distribute half of its stake in
its real estate unit to shareholders, unlocking value in
frustration over what it believed was a low share price.
Under the restructuring plan, the Toronto-based company will
retain a 20 percent ownership interest in Dundee Realty, while
the unit's president and chief executive, Michael Cooper, will
hold the remaining 30 percent stake.
"It is a good deal for shareholders," said Barry Schwartz,
portfolio manager at Baskin Financial Services in Toronto, who
said he owns the stock personally but does not hold it for
"For long-term shareholders, it's been a long time coming.
They've sold off their mutual fund arm and their spinoff
company, the REIT, the industrial and now the international," he
added. "They're building a conglomerate, and really following
the model used by Brookfield Asset Management to unlock the
value and then get management fees up to the top parent
Shares of Dundee rose C$3.19 to C$30.00 in midday trade on
the Toronto Stock Exchange, after hitting a new 52-week high of
C$30.55 and flying nearly 42 percent above the 2012 low of
$C21.16 hit on Aug. 15.
Dundee Corp has a 70 percent stake in Dundee Realty.
Dundee Chief Executive Ned Goodman will become board
chairman of the new company, while Cooper will be president and
CEO, the company said in a statement.
"The board believes that the current market capitalization
of the corporation understates the intrinsic value of its
underlying assets," Goodman said in a statement.
"With two separate publicly traded entities, the
investment community will be better able to assess the value of
each of these businesses."
The new entity would have two classes of common shares along
with preferred shares. The plan is subject to regulatory, court
and shareholder approvals, with a shareholder vote expected in
the first quarter of 2013, the company said.
Dundee Corp has some C$65 billion ($65.99 billion) in assets
under management and administration. Its Canadian wealth
management activities are conducted through its unit
DundeeWealth Inc in which it has a 62 percent
($1 = 0.99 Canadian dollars)
(Reporting by Andrea Hopkins; Editing by Jan Paschal)