CI Financial files C$1 billion shelf prospectus

TORONTO, Nov 4 (Reuters) - CI Financial Income Fund CIX_u.TO has filed a shelf prospectus to raise up to C$1 billion ($870 million) in debt, subscription receipts or trust units sometime over the next 25 months.

CI Financial, one of Canada's largest independent fund managers, would use the proceeds to repay debt and for general purposes, including acquisitions and investments, it said in a filing with Canadian securities regulators on Monday.

It may sell securities through underwriters, or to one or more purchasers directly, CI said.

On Oct. 6, insurance company Sun Life Financial Inc (SLF.TO) said it would sell its 37.5 percent stake in CI to Bank of Nova Scotia (BNS.TO) for C$2.3 billion.

Since this transaction was announced, CI has said it will convert from an income trust back to a traditional corporate structure, and its board adopted a unitholder rights plan.

Unitholders will be asked to approve both changes at a special meeting on Dec. 19.

CI said one motivation for converting back to a corporation was to improve its prospects for acquisitions, including deals outside Canada. Tax-sheltered income trusts will lose their special tax advantages in 2011, and they are limited in how many new units they can issue before then.

CI Chief Executive Bill Holland has that said potential deals had been derailed because sellers did not want to receive CI units. The company said last August that it had talked to "a number of parties" about possible strategic combinations.

CI has also said that its rights plan is designed to ensure "fair treatment" for all unitholders in case of a transaction that amounts to a change of control.

The shelf filing indicates that Scotiabank will close its acquisition of the 37.5 percent stake in CI on Nov. 19.

Analysts have speculated that Scotiabank may move to buy all of CI, or may want to sell its own mutual fund business to CI in exchange for a bigger stake in the combined entity.

CI is due to report quarterly results on Nov. 11. ($1=$1.15 Canadian) (Reporting by Lynne Olver; editing by Rob Wilson)