Scotiabank puts $3.8B stake in CI Financial up for sale
Wealth management firm bought from Sun Life in 2008
Scotiabank has put a “for sale” sign on its CI Financial Corp., announcing it plans to sell all or part of its 37 per cent stake in the wealth management company.
It estimates the current market value of the CI Financial at $3.8 billion. The bank said it has plans to use the cash for other strategic priorities.
Scotiabank bought the stake in CI from Sun Life Financial Corp. in 2008 for $2.3 billion, as a way to build its wealth management business.
Scotiabank said in a news release it has decided not to exercise an option to buy all of the company and will instead “pursue alternatives for monetization” of the investment.
In 2010, ScotiaBank took over Dundee Wealth Inc. and substantially built its wealth management holdings.
CI issued a response to the announcement Thursday, saying the bank's decision “has no impact on the management of CI or the strong fundamentals of its business.”
"Scotiabank is entitled to dispose of their shares as they see fit. As always, CI will work in the interests of all of our shareholders and management will remain focused on the continued success of our business," CI chairman William T. Holland said in the statement.
CI stock fell four per cent to $34.69 in trading today in Toronto. The stock has risen from below $20 in 2011.