SPECIAL COMMITTEE OF CANACCORD GENUITY GROUP INC. RESPONDS TO SHAREHOLDER MEETING REQUISITION

TORONTO, March 8, 2023 /CNW/ - The Special Committee of the Board of Directors of Canaccord Genuity Group Inc. (TSX: CF) (the "Company") acknowledges receipt by the Company of a requisition from SKKY Capital Corporation, a shareholder of the Company controlled by J. Gordon Flatt, requesting that the Company call a shareholder meeting for the purposes of removing the current members of the Special Committee from the Board and appointing two new directors.

The Special Committee is comprised of Gillian H. Denham (Chair), Charles N. Bralver, Dipesh J. Shah, and Sally J. Tennant, all of whom are independent.

The Board established the Special Committee in August 2022 to review and consider the proposed management buy-out, which was commenced by way of take-over bid on February 27, 2023 (the "Offer") and constitutes an "insider bid" under applicable securities laws. The Special Committee continues to properly discharge its fiduciary duties in ensuring that the interests of minority shareholders are fairly considered in the context of the Offer.

As has been previously stated, the Special Committee believes the management-led group's offer price of $11.25 per share (the "Offer Price") undervalues the Company and the Special Committee is not prepared to recommend in favour of it. The Special Committee's decision relied in part on the independent valuation provided by RBC Capital Markets that, as of February 15, 2023, and subject to the assumptions, limitations and qualifications set forth in RBC's written valuation, the fair market value of the common shares of the Company is in the range of $12.75 to $15.75 per common share, or between 13% and 40% more than the current Offer Price.  

Since August 2022, the Special Committee has engaged in discussions with the management group in an attempt to negotiate an improvement to the Offer; however, the Special Committee and the management group have not come to an agreement on an improved Offer. As a result, the Special Committee engaged Barclays Capital Canada Inc. to commence an alternative transaction process ("Alternative Transaction Process") to explore potential strategic alternatives to enhance shareholder value.

Shareholders should be aware that SKKY Capital Corporation is the "Major Shareholder" referred to in the Offer that signed an irrevocable lock-up agreement that requires it to tender its common shares to the Offer and vote against any other transaction, even if such transaction were to provide greater value to shareholders.

In a letter provided to the Board in August 2022, Mr. Flatt explained his rationale for agreeing to irrevocably lock-up the shares he controls at a price that he acknowledges does not fully recognize the value of the Company, which he viewed as being more than $15.00 per share. Mr. Flatt stated that, in his view, the $11.00 price offered by management at that time was reasonable given "market uncertainties, war, rising interest rates and inflation." 

While Mr. Flatt has decided to accept the Offer, the Special Committee must consider all shareholders and stakeholders in fulfilling its responsibilities under its Board-authorized mandate to assess, review and make recommendations in respect of the Offer, and to consider alternatives available in the circumstances to enhance shareholder value.

The Special Committee has also heard from other minority shareholders, who believe the work of the Special Committee to attempt to surface alternative transactions is entirely appropriate.

The Special Committee is in the process of preparing a directors' circular that describes the actions it has taken in responding to the Offer, including consideration of the rationale provided by Mr. Flatt to the Board in agreeing to irrevocably lock up his shares to the Offer. Further details will be contained in the directors' circular, which the Special Committee expects will be mailed to shareholders early next week.

The Special Committee is reviewing and considering the requisition with its independent legal and financial advisors and will respond appropriately in due course. In the meantime, shareholders are advised not to take any action.

ABOUT CANACCORD GENUITY GROUP INC.

Through its principal subsidiaries, the Company is a leading independent, full-service financial services firm, with operations in two principal segments of the securities industry: wealth management and capital markets. Since its establishment in 1950, the Company has been driven by an unwavering commitment to building lasting client relationships. We achieve this by generating value for our individual, institutional and corporate clients through comprehensive investment solutions, brokerage services and investment banking services. The Company has wealth management offices located in Canada, the UK, Guernsey, Jersey, the Isle of Man and Australia. The Company's international capital markets division operates in North America, UK & Europe, Asia, Australia, and the Middle East.

Canaccord Genuity Group Inc. is publicly traded under the symbol CF on the TSX.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This press release may contain "forward-looking information" as defined under applicable securities laws ("forward-looking statements"). These statements relate to future events or future performance and reflect management's or the directors' expectations, beliefs, plans, estimates, intentions and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts, including, but not limited to: business and economic conditions; the Company's growth, results of operations, performance and business prospects and opportunities; the availability of alternative transactions that may emerge from the Alternative Transaction Process or otherwise; and the impact of the management group's position and the significant shareholder's irrevocable lock-up agreement on the Alternative Transaction Process. Such forward- looking statements reflect management's current beliefs and are based on information currently available to management. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", "target", "intend", "could" or the negative of these terms or other comparable terminology. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and a number of factors could cause actual events or results to differ materially from the results discussed in the forward-looking statements.

In evaluating these statements, readers should specifically consider various factors that may cause actual results to differ materially from any forward-looking statement. These factors include, but are not limited to, whether any alternative transaction to the Offer may emerge, pursuant to the Alternative Transaction Process or otherwise, and the Company's ability to consummate such alternatives; the possibility that the management group may not be able to obtain or satisfy, in a timely manner or otherwise, the minimum tender of common shares, or the required regulatory approval and other conditions necessary to complete the Offer; the possibility that SKKY Capital Corporation is successful in its request; market and general economic conditions (including slowing economic growth, inflation and rising interest rates); the dynamic nature of the financial services industry; the potential continued impacts of the coronavirus (COVID-19) pandemic on the Company's business operations and on the global economy; the impact of the war in Ukraine and the resulting humanitarian crisis on the global economy, in particular its effect on global oil, agriculture and commodity markets; and the risks and uncertainties discussed from time to time in the Company's interim condensed and annual consolidated financial statements, its annual report and its annual information form ("AIF") filed on www.sedar.com as well as the factors discussed in the sections entitled "Risk Management" and "Risk Factors" in the AIF, which include market, liquidity, credit, operational, legal and regulatory risks.

Although the forward-looking statements contained in this press release are based upon assumptions that the Company believes are reasonable, there can be no assurance that actual results will be consistent with these forward-looking statements. The forward-looking statements contained in this press release are made as of the date of this press release and should not be relied upon as representing the Company's views as of any date subsequent to the date of this press release. Except as may be required by applicable law, the Company does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether as a result of new information, further developments or otherwise.

SOURCE Canaccord Genuity Group Inc.

Investor and media inquiries: Peter Block, Longview Communications, [email protected]