Dundee Securities has been in a state of flux since Bank of Nova Scotia announced its purchase of DundeeWealth in November, which stipulated that Dundee Securities would be spun out as a freely traded entity.
The structure raised some eyebrows, to say the least, about Dundee Securities' future, especially because it could get cut off from the retail network that helps to sell so many new issues.
Instead of getting caught up in the chatter, Dundee has stayed busy, getting involved and sometimes winning new issue mandates. The latest deal came Monday morning as Dundee led a $12-million bought deal for Aldridge Minerals Inc. Other recent deals include co-leading a $30-million offering for Rockgate Capital Corp. and leading a $10-million offering for Rodinia Lithium Inc.
Make no mistake, these aren't huge victories because the deals are quite small, but at least some revenue is coming in. Plus, Dundee provided a fairness opinion to Inmet's board for its merger with Lundin.
Dundee also filed its final prospectus for its spinout on Friday. In the future, the publicly traded entity will have three business lines: capital markets (investment banking, equity sales, research), retail advisory (44 advisers, $3.1-billion of assets under administration) and a structured products arm.
Last week DundeeWealth's board also approved the special dividend of one common share of Dundee Capital Markets per DundeeWealth common share and 0.83 of a DCM common share per first preference share. Right after the dividend is paid, Dundee Corp. will own 48 per cent of the company and Scotia will own 18 per cent.
The expiry date for Scotia and DundeeWealth's deal was also pushed back to Feb. 1 because of a few legal hindrances.
Dundee Capital Markets underwent a round of layoffs in December to re-focus in preparation of the spinout. A total of 16 people were affected, including research analysts who cover technology and bio-tech as well as portfolio strategy. Sales and trading staff who cover these sectors were also let go.
Tim Kiladze