Canada antitrust regulator says reviewing Smith bid for Home Capital

First National Financial

04/04/2023 19:06

(Adds background)
    By Divya Rajagopal and Maiya Keidan
       TORONTO, April 4 (Reuters) - Canada's antitrust
regulator said on Tuesday it is reviewing the potential
acquisition of Canadian lender Home Capital Group Inc  HCG.TO 
by privately held peer Smith Financial Corp.
    "I can confirm that the Competition Bureau is reviewing the
potential acquisition of Home Capital Group by Smith Financial
Corporation," a spokesperson for the regulator said in an email
to Reuters.
    The regulator declined to provide further details. Home
Capital and Smith Financial were unavailable to immediately
provide comment.
        Home Capital, rescued by Warren Buffett's Berkshire
Hathaway Inc  BRKa.N  five years ago, announced in November it
would be taken private by Smith Financial in a C$1.7 billion
($1.27 billion) deal. Canada's housing market was slowing due to
a sharp rise in interest rates after exponential price growth
during the pandemic.
    Smith Financial is controlled by Stephen Smith, the
co-founder of Home Capital's larger rival First National
Financial Corp  FN.TO  and a top shareholder of lender EQB Inc
 EQB.TO .
        Shareholders voted 99.8% in favor of approving the deal
at a special meeting on Feb. 8.
  
        If Smith Financial does not close the deal before the
May 20 deadline, it has to pay shareholders an extra 25 Canadian
cents per share for every three months of delay.
  


 (Reporting by Divya Rajagopal and Maiya Keidan in Toronto;
Writing by Ismail Shakil; Editing by Denny Thomas, Franklin Paul
and Richard Chang)
 ((ismail.shakil@tr.com;))