ECONOMY

Fairfax equity issuance to fund Eurolife buy

fairfax-equity-issuance-to-fund-eurolife-buy

Fairfax Financial Holdings said late on Monday it plans to raise 735 million Canadian dollars ($536.42 million) through an equity issuance to fund its acquisition of interests in Eurolife ERB Insurance Group Holdings and ICICI Lombard General Insurance Co.

The offering of 1 million shares, which is being run as a bought deal – with the underwriters BMO Capital Markets, CIBC Capital Markets and RBC Capital Markets guaranteeing Fairfax a price of 735 Canadian dollars per subordinate voting share, is expected to close on March 2.

In December, Fairfax agreed to buy an 80 percent stake in Eurolife ERB Insurance from Greek lender Eurobank Ergasias SA for 316 million euros.

Fairfax, headed by well-known contrarian investor Prem Watsa, made billions by correctly calling the 2008 financial crisis.

Watsa has since bet on a rebound in the Greek economy via a number of investments there, including one in Eurolife’s parent Eurobank.

[Reuters]