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Discussion Starter · #1 ·
Definity Financial Corporation Prices $2.1 Billion Initial Public Offering

Economical has become the first Canadian federally-regulated property and casualty insurer to demutualize.

It will be interesting to see how they perform and whether or not other mutual's follow suit. Regardless, we will likely see continued consolidation in the industry. This may bode well for DFY.
 

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We will be getting some shares at the IPO. The company deemed we would receive cash instead of shares.

Shares were pre-sold @ $22 a share in private offerings, but opened on the exchange @ $29 a share.

Which price should we expect to receive ?
 

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I'm pessimistic and have ASSumed that we will be getting the $22. I requested cash, but have not had that confirmed (or denied). Did Economical contact you about that?

Just checked the "Join our Future" website and found this (seems to say that we'll be getting the $22):

6.6 Distribution of Cash Payments
(1) The IPO Price will be determined at the time that the Underwriting Agreement is entered into, and at that time the amount
of cash to be distributed to each Cash Recipient can be determined and will constitute an obligation of the Company to pay

such amounts.
(2) All cash payments will be paid by the Company out of the Net IPO Proceeds. Subject to Section 6.8, a cash payment will be
made to each of the following groups and such cash payments shall be initiated sequentially, on or after the Final

Consideration Date, in the following order:
(a) first, to the Foundation, pursuant to Section 6.2(2);

(b) second, to those deemed Cash Recipients who are Foreign Recipients, Governments or Minors, pursuant to
Section 6.2(1);
(c) third, to those deemed Cash Recipients pursuant to Section 6.5(2);

(d) fourth, to Cash Recipients who elected to receive cash and who are not Foreign Recipients, Governments or
Minors, pursuant to Section 6.2(1), and to Mixed Recipients (in respect of their Cash Portion), pursuant to

Section 6.4(2); and
(e) last, to Share Recipients and Mixed Recipients (in respect of their Share Portion), pursuant to Section 6.7(3), if
applicable
 

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The mutual policy holders will receive $501,000 each and it was calculated at $22 per share.

All the mutual policyholders received shares and must hold them for 180 days.

The non-mutual policyholders will receive varying amounts depending on the type, duration, and premiiums of their policy.

The mutual benefits are above the previous estimated $300,000 to $430,000 range.

Letters are being sent advising everyone their payout numbers. The cheques will be mailed before the end of the year.

The benefits are taxable as income.
 
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Discussion Starter · #8 ·
Shares are not subject to tax until sold. Plus they will be subject to capital gains only. I'm not sure but I was under the impression that the dividend will be ineligible or a combination of eligible / ineligible. Tax consequence will depend on your marginal tax rate.
 
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