Fairfax Financial CEO Prem Watsa
Fairfax Financial Holdings Ltd. is delisting from the New York Stock Exchange, having decided that the expense and inconvenience of being listed in the United States outweigh the benefits.
The Toronto-based company has been listed on the NYSE for about seven years. In 2006, it filed a lawsuit in New Jersey alleging that a group of powerful U.S. hedge funds short sold its shares and then schemed to drive down its stock price using a series of tactics, including intimidating executives and influencing analysts.
For a time, the company felt that a U.S. listing was necessary to enable its U.S. employees to own its shares, and to attract U.S. investors.
But these days it's relatively simple for U.S. investors to use the Toronto Stock Exchange, and Fairfax's ability to easily raise $1-billion through a share offering in September has demonstrated its ability to attract investors. Fairfax sold most of the shares on a so-called agency basis, meaning it took on the risk that they might not sell, rather than offloading the issue to banks. The insurer was raising the money to buy the part of its subsidiary Odyssey Re Holdings Corp. that it didn't already own.
"After our recent privatization of Odyssey Re, Fairfax now wholly owns all of its primary businesses and is the largest property and casualty insurance company based in Canada, with worldwide operations in over 50 countries," chief executive officer Prem Watsa said in a news release Thursday. "While our decentralized operations have global reach, after reviewing the factors relevant to our continued listing on the NYSE, we determined that our company and its shareholders will be better served by the simplified focus and lower cost resulting from the maintenance of only our original TSX listing."
The voluntary delisting will have no impact on the company's substantial operations in the U.S., he added.
"In recent years, as markets have become significantly more global and liquid, our constituents, including shareholders and employees, no longer require multiple listings," Mr. Watsa said.
The delisting is expected to take effect around Dec. 10.