Fairfax in C$650m deal to part fund Brit acquisition

Financial services company Fairfax has entered into a C$650 million ($521 million) deal to part fund its acquisition of insurer Brit.

Fairfax entered into an agreement with a syndicate of underwriters led by BMO Capital Markets, under which the underwriters have agreed to buy on a bought deal basis 1,000,000 subordinate voting shares at a price of C$650 each, amounting to gross proceeds of C$650 million.

The financial services company said it may raise additional funding for the acquisition of Brit through possible future debt and/or preferred share issuances.

It added that if the acquisition of Brit falls through, it will use the proceeds “to augment its cash position, to increase short-term investments and marketable securities held at the holding company level, to refinance or retire outstanding debt and other corporate obligations of Fairfax and its subsidiaries from time to time, and for general corporate purposes”.