The final regulatory approval for CAA Club Group's acquisition of Echelon Financial Holdings Inc.'s main operating subsidiary, Echelon Insurance, has been obtained.
The deal is expected to close on or about May 31. Echelon Financial expects net proceeds of approximately C$166 million. From these proceeds, C$12 million will be put into escrow as the company and CAA Club review and confirm the calculation of regulatory minimum capital test at closing.
Echelon Financial's board declared a special distribution of C$8.80 per outstanding common share of the company, subject to the completion of the transaction. The special distribution will be paid June 17 to shareholders of record as of June 11.
Due bills will be used in the trading of the common shares through the facilities of the Toronto Stock Exchange from June 10 to 17. Buyers of the shares during the due bill period will get the special distribution payment. Trading of the common shares will be on an ex-distribution basis and will start June 18, while the due bill redemption date is June 19.
After the closing of the deal and the special distribution payment, Echelon Financial's 75% shareholding in Insurance Co. of Prince Edward Island, as well as its cash reserve of about C$80 million, will be the only material assets remaining in the company.