Fairfax To Buy Pethealth For $2.79 A Share

(RTTNews) - Fairfax Financial Holdings Ltd (FFH.TO, FFH_U.TO) Friday agreed to acquire all of the outstanding common shares of Canadian pet insurance provider Pethealth Inc (PTZ.TO) for $2.79 per share in cash.

Also Fairfax will buy all of the outstanding preferred shares of Pethealth for a purchase price of $2.79 per share in cash, plus any dividends accrued but unpaid up to, but excluding, the day of closing.

The deal price represents a premium of about 26% to the closing price of Pethealth's common shares on the TSX on August 29 and a premium of about 69% to the closing price of the shares on the TSX on August 15, when Pethealth announced a review of strategic alternatives.

Total cash consideration of about $100 million will be paid for Pethealth's common and preferred shares and options. The deal, which will be completed by way of a plan of arrangement, is expected to close in the fourth quarter of 2014.

The board of Pethealth has determined to recommend that shareholders of Pethealth vote in favour of the Arrangement.

Mark Warren, chief executive officer and a director of Pethealth who owns about 9.7% of the outstanding common shares, voted against the approval of the deal.

Certain shareholders of Pethealth, who in the aggregate beneficially own about 14.5% of the outstanding common shares and 40.4% of the outstanding preferred shares, have agreed to support the deal.

In aggregate, shareholders holding 50.9% of the outstanding common shares, 65.2% of the outstanding preferred shares and 52.7% of all outstanding shares in both classes have entered into voting support agreements.

If the arrangement agreement is terminated under certain circumstances, a $3.5 million termination fee is payable by Pethealth to Fairfax.