Canadian Western Bank (CWB) has announced the immediate termination of its Dividend Reinvestment Plan (DRIP) in light of its forthcoming acquisition by the National Bank of Canada (NBC). This strategic move aligns with the terms of the DRIP and the anticipated consolidation of the two financial institutions.
Understanding the Dividend Reinvestment Plan (DRIP)
CWB’s DRIP allowed shareholders to reinvest their cash dividends into additional common shares of the bank. This program provided an avenue for investors to increase their holdings without incurring transaction fees, promoting long-term investment growth.
The plan was administered by Computershare Trust Company of Canada, which facilitated the purchase of shares on behalf of participating shareholders.
Termination Details and Shareholder Implications
Effective immediately, the DRIP has been terminated. Computershare Trust Company of Canada will distribute Direct Registration System (DRS) Advices to participants, detailing the whole CWB common shares held in their DRIP accounts. Additionally, participants will receive cheques compensating for any fractional shares remaining in their accounts.
Upon the completion of the acquisition, all whole CWB common shares, including those previously held under the DRIP, will be exchanged for NBC common shares according to the agreed-upon exchange ratio. Shareholders are advised to submit a valid letter of transmittal to Computershare Investor Services Inc. to facilitate the receipt of their entitled NBC common shares.
Acquisition Overview
The acquisition of CWB by NBC, valued at approximately $5 billion, marks a significant consolidation in the Canadian banking sector. This strategic move is set to enhance NBC’s presence in Western Canada, leveraging CWB’s established client base and regional expertise.
The transaction has received all necessary regulatory approvals, including clearance from the Competition Bureau and the Office of the Superintendent of Financial Institutions, with the final approval granted by the Minister of Finance. The closing of the transaction is anticipated to occur on February 3, 2025.
Key Dates and Actions for Shareholders
| Action Required | Responsible Party | Deadline | Contact Information |
|---|---|---|---|
| Submission of valid letter of transmittal | CWB Shareholders | Prior to transaction closing date | Computershare Investor Services Inc. (1-800-564-6253) |
| Receipt of DRS Advices and compensation for fractional shares | Computershare Trust Company of Canada | Following DRIP termination | 1-800-564-6253 |
| Exchange of CWB shares for NBC shares | Automatic upon transaction completion | Post-closing date | 1-800-564-6253 |
The termination of CWB’s DRIP is a procedural step in the broader context of its acquisition by NBC. Shareholders are encouraged to take note of the outlined actions and timelines to ensure a smooth transition of their investments. For further inquiries, shareholders may contact Computershare Trust Company of Canada at 1-800-564-6253.
FAQs
Why was the Dividend Reinvestment Plan (DRIP) terminated?
The DRIP was terminated in preparation for the acquisition of CWB by NBC, to streamline the consolidation process.
What will happen to my shares previously held under the DRIP?
Whole shares will be converted into NBC common shares based on the agreed exchange ratio upon completion of the acquisition. Fractional shares will be compensated through cash payments.
Do I need to take any action regarding my shares?
Yes, shareholders should submit a valid letter of transmittal to Computershare Investor Services Inc. to facilitate the exchange of CWB shares for NBC shares.
