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Press release from CNW Group

Canadian Western Bank proposes a redemption of all of its outstanding warrants (TSX: CWB.WT) at a premium to current market value

Monday, July 18, 2011

Canadian Western Bank proposes a redemption of all of its outstanding warrants (TSX: CWB.WT) at a premium to current market value15:05 EDT Monday, July 18, 2011EDMONTON, July 18, 2011 /CNW/ - Canadian Western Bank (TSX: CWB) ("CWB" or the "Bank") today announced it is calling a meeting (the "Meeting") of the holders (the "Warrantholders") of its common share purchase warrants (the "Warrants") for August 19, 2011. At the Meeting, Warrantholders will be asked to consider and, if deemed appropriate, pass an extraordinary resolution (the "Extraordinary Resolution") to amend the Warrant Indenture under which the warrants were created to provide CWB with an option to redeem, on or before September 30, 2011, all, but not less than all, of the issued and outstanding Warrants at a redemption price of $17.21 in cash. The redemption price represents a $0.46 premium over the volume weighted average price of the Warrants on the Toronto Stock Exchange (TSX) for the 10 previous trading days as reported by Bloomberg LP after the market close on July 15, 2011. The redemption price represents a premium of $1.21 over the July 15, 2011 closing market price of the Warrants as reported by the TSX.To pass, the Extraordinary Resolution requires a quorum of not less than 50% of outstanding Warrants, represented in person and by proxy, and an affirmative vote of not less than 66 2/3% of the votes cast at the Meeting. Each Warrant is entitled to one vote. The premium offered on the proposed redemption was negotiated between CWB and Flatiron Capital Management Partners (Flatiron), who control approximately 52% of the outstanding Warrants. Flatiron has entered into an agreement with CWB to vote in support of the Extraordinary Resolution on behalf of its accounts. CWB and Flatiron have also entered into a conditional subscription agreement whereby the Bank may issue on the redemption date of the Warrants, subject to certain conditions, up to 2,277,800 CWB common shares to Flatiron accounts, via a private placement, at a price of $30.46 per share. The subscription price for the private placement represents the volume weighted average price of CWB common shares on the TSX for the 10 previous trading days as reported by Bloomberg LP after the market close on July 15, 2011."We believe the proposed redemption of all outstanding warrants at a meaningful premium to the current market price is a win-win for both warrantholders and existing CWB shareholders," said Larry Pollock, President and CEO of CWB. "Given that the vast majority of warrants originally issued have already been exercised by holders or purchased by the Bank for cancellation, coupled with the fact that there is one institutional shareholder currently holding more than half of what's left outstanding on behalf of its accounts, the future market for these securities may be relatively illiquid. The proposed redemption represents an opportunity for warrantholders to realize a premium on their investment without having to incur transaction fees. Warrantholders will also maintain their right to convert the warrants into an equivalent number of CWB shares anytime before the redemption date at the exercise price of $14 per warrant.""We believe successfully eliminating the warrants will also benefit existing CWB shareholders," continued Mr. Pollock. "The redemption should reduce both current and future dilution attributed to the warrants, thereby increasing diluted earnings per common share. The redemption will also increase certainty and help with our ongoing capital planning by further simplifying the Bank's overall capital structure. The strategy is consistent with our objectives to increase shareholder value and prudently manage capital in accordance with both existing and future regulatory requirements while also supporting CWB's continued strong growth."The Meeting will be held at 11:00 a.m (MDT) in the Conference Centre at the Concourse Level of Canadian Western Bank Place, 10303 Jasper Avenue in Edmonton, Alberta. All Warrantholders of record as at July 18, 2011 are invited to attend the Meeting. Warrantholders who cannot attend the meeting in person are encouraged to submit their proxy, which will be included with a management information circular (the "Circular") to be mailed to Warrantholders on or about July 22, 2011. All Warrantholders should review the Circular in its entirety, including the section which describes the expected tax consequences of the redemption for Warrantholders. The Circular will also be available under the Bank's profile at www.sedar.com. Results of the Meeting will be binding on all Warrantholders, whether they are present or absent from the Meeting.In the event that the Extraordinary Resolution is passed, the Bank's current intention is to proceed with the redemption on or about August 31, 2011. CWB will issue a news release following completion of the Meeting to disclose the voting results and also confirm the expected timing of the redemption, if applicable.The Bank has received conditional approval of the TSX for the amendment to the Warrant Indenture to provide for the right to redeem the Warrants, subject to the Bank satisfying certain customary requirements of the TSX.  The private placement to Flatiron is subject to the approval of the TSX.Caution Regarding Forward-Looking InformationThis news release contains "forward-looking information" (as defined in applicable Canadian securities legislation) that is based on expectations, estimates and projections as of the date of this news release. Examples of forward-looking information can be identified by the use of words such as "should", "may", "plans", "expects" and "expected". Forward-looking information, by its nature, requires the Bank to make assumptions and is subject to significant risks and uncertainties which may give rise to the possibility that stated expectations or conclusions will not prove to be accurate and that the assumptions used may not be correct. These factors, many of which are beyond the Bank's control, include: general business and economic factors, volatility and liquidity in financial markets, changes in economic and political conditions; legislative and regulatory developments; legal developments; and, the level of competition in the Bank's markets. It is important to note that the preceding list is not exhaustive of possible factors. Additional information about these and other factors is located in reports filed with Canadian securities regulators.The Bank does not intend to update this forward-looking information, except as required by applicable securities law. This forward-looking information should not be relied upon as representing CWB's views as of any date subsequent to the date of this news release.About Canadian Western Bank GroupCanadian Western Bank offers highly personalized service through 39 branch locations and is the largest publicly traded Canadian bank headquartered in Western Canada. The Bank specializes in mid-market commercial lending and offers a full complement of personal banking services. The Bank, along with its operating affiliates, National Leasing Group Inc., Canadian Western Trust Company, Valiant Trust Company, Canadian Direct Insurance Incorporated, Adroit Investment Management Ltd. and Canadian Western Financial Ltd., collectively offer a diversified range of financial services across Canada and are together known as Canadian Western Bank Group. The common shares of Canadian Western Bank are listed on the Toronto Stock Exchange under the trading symbol "CWB". The Bank's Series 3 Preferred Shares and common share purchase warrants trade on the Toronto Stock Exchange under the trading symbols "CWB.PR.A" and "CWB.WT", respectively. Refer to www.cwbankgroup.com for additional information.For further information: Kirby Hill, CFA Director, Investor & Public Relations Canadian Western Bank Phone: (780) 441-3770 E-mail: kirby.hill@cwbank.com   Tracey Ball Executive Vice President & CFO Canadian Western Bank Phone: (780) 423-8865