Canaccord's takeover move boosts RF Capital

Canadian investment firm RF Capital Group Inc. jumped to its highest point since 2019 after rival Canaccord Genuity Group Inc. said it's willing to “substantially” raise its takeover offer.

Toronto-based RF Capital rose as much as 12 per cent in Toronto after Canaccord chief executive Dan Daviau said his firm is ready to boost its bid to seal a deal. RF rebuffed Canaccord's initial proposal of $2.30 per share. “We're prepared to increase our price substantially, but we don't know what price they're looking for because they won't talk to us,” Daviau said.

A pact would unite two of Canada's largest independent firms in wealth management, which big banks have dominated.

The updated proposal would include improved terms for RF Capital's investment advisers, Daviau said, allowing them to cash out some holdings of shares held in escrow. He declined to say what price Canaccord would be willing to pay. The current proposal values RF at $367 million.

Canaccord has little prospect of taking control of RF without winning the support of the Richardson family, whose closely held conglomerate, James Richardson & Sons Ltd., owns 44 per cent of RF Capital, according to data compiled by Bloomberg.

RF Capital's minority shareholders “should be provided an opportunity to consider the proposal,” Canaccord said Wednesday.

“Canaccord Genuity is exploring legal options available, as well as options of taking our offer directly to RCG shareholders.”

RF Capital shares gained closed up 9.81 per cent to $2.35 Wednesday in Toronto. They are up 31 per cent since Canaccord's interest became public in March.