Skip to main content
// //

There has been a lot of talk about what Bank of Nova Scotia's purchase of DundeeWealth means for both the bank and for Dundee Capital Markets, which was spun out on its own. But what about Dundee Corp.?

Turns out it's doing just fine. In fact, the big transaction has Dundee Corp. swimming in cash, forcing analysts to speculate what can be done with all that money.

"DC has many options at its disposal," noted GMP analyst Stephen Boland. "While possible in the near to medium term, we do not believe a status quo scenario is likely in the long term. We believe that some form of buyback and possibly an increase in the dividend is likely."

Story continues below advertisement

Other, bigger, possibilities include investing in more commodity companies or even going private.

To recap, Dundee Corp. was the largest shareholder of DundeeWealth when Scotia announced its plan to buy, owning 48 per cent of the target. That means Dundee Corp. has now received $1.5-billion in Scotia common and preferred shares and Mr. Boland notes that will yield approximately $50-million in annual dividends.

When the deal first broke, all anyone knew was that the deal would gut a huge part of Dundee Corp, but it took a while to do the exact calculations. Historically, DundeeWealth was the largest lever in the net asset value of the Corp.'s shares, with a one dollar change in share price moving Dundee Corp.'s NAV $1.04, according to GMP. Now a dollar change in the price of BNS stock moves Dundee Corp.'s NAV $0.27.

Going forward, the six main public companies that Dundee Corp. holds are Scotia, Dundee REIT, Dundee Precious Metals, Eurogas, Breakwater and Dundee Capital Markets.

Regardless of what the company does with the cash, "we believe there is little downside with [Dundee Corp.]considering the leverage to BNS, and commodity stocks," Mr. Boland noted.

Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies