Equitable Group Inc (Symbol: EQB)

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Pickles
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Equitable Group Inc (Symbol: EQB)

Post by Pickles »

Time for Equitable to put on its big boys pants and come out from under HCG's shadow....

EQB has its own 2 billion credit facility as "standby financing", after revealing it is experiencing daily withdrawals of $75 million from HISAs. But don't worry, folks, this merely shows that Canada's six big banks know a winner when they see one: Equitable CEO Andrew Moor accentuates the positive...


And from the CNW newsfeed from my BMIOL account:
"Mr. Moor thanked the leaders of all six banks, their executive teams and the employees involved in the detailed due diligence process "for their tremendous personal effort over a few short days to make such an enormous supply of backstop liquidity available to Equitable Bank. Beyond the capital and credit assessment, we have benefitted greatly from their wise advice and judgement over the past few days. We are members of a strong banking industry serving Canadians from coast to coast. Thank you."

"tremendous personal effort" over the weekend? No need to worry, though. We are members of a strong banking industry -- as debtors.
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Pickles
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Re: Equitable Group Inc (Symbol: EQB)

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Equitable is about to acquire 84% of Concentra Bank from SaskCentral initially with the remainder to be purchased from other? shareholders post-closing.
Pursuant to the Acquisition, Equitable entered into a share purchase agreement to acquire SaskCentral's 84% common share equity interest in Concentra, as well as support agreements with additional Concentra shareholders representing a majority of the remaining 16%. Together, these agreements will enable Equitable to acquire 100% of Concentra for a combined premium of $35.7 million to book value of common equity. Based on Concentra's book value at November 30, 2021, this would result in a total purchase price of $470 million, subject to customary adjustments at the time of closing, representing a 1.08x price-to-book multiple.
It will be financed in part with Subscription Receipts
EQB has entered into an agreement with a syndicate of underwriters (the "Underwriters") bookrun by TD Securities Inc. and RBC Capital Markets, and co-led by CIBC World Markets, Scotia Capital Inc. and BMO Capital Markets, for the issuance of 2,840,000 subscription receipts (the "Subscription Receipts") on a bought deal basis. The Subscription Receipts will be offered at a price of $70.50 per Subscription Receipt, for gross proceeds of approximately $200 million (the "Offering"). EQB has also granted the Underwriters an over-allotment option to purchase up to an additional 426,000 Subscription Receipts, on the same terms and conditions as the Offering, exercisable no later than 30 days after the closing of the Offering.

The net proceeds from the Offering will be held in escrow and are intended to be used by EQB to fund a portion of the purchase price for the acquisition of Concentra. Each Subscription Receipt will entitle the holder to receive one common share of EQB upon the closing of Equitable's acquisition of SaskCentral's 84% interest in Concentra.
priced at $70.50 to be held in escrow until closing at which time each receipt convers to a EQB share. That will get Equitable to a market cap approaching $3B at current stock prices.

Edit: Fixed quotes
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brady
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Re: Equitable Group Inc (Symbol: EQB)

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They have been successful in lending to people who have difficulty fitting traditional lending criteria especially for things like a home mortgages. Small business operators and the immigrant communities are two that they have been successful with. They have scored very well in making good lending decisions.
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Re: Equitable Group Inc (Symbol: EQB)

Post by Bylo Selhi »

brady wrote: 08 Feb 2022 10:58 They have been successful in lending to people who have difficulty fitting traditional lending criteria especially for things like a home mortgages. Small business operators and the immigrant communities are two that they have been successful with. They have scored very well in making good lending decisions.
Likewise their rival, Home Trust. In fact when HT was under attack from OSC and an infamous short seller a few years ago it emerged that their mortgage default rate was substantially lower than the big-5 banks'. It seems that "small business operators and the immigrant communities" are more diligent in repaying their debts than many of the critics, especially of the latter group.
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Re: Equitable Group Inc (Symbol: EQB)

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EQB will be more diversified though with the Concentra CU related businesses (business services it seems) plus will be about twice the size of HCG. We won't know until later this year what their merged businesses will look like. The market likes it...so far...today.

There are a number of lenders in the alternative mortgage business, some of them relative unknowns including upstart Wealth One Bank that caters to the immigrant Chinese community in BC particularly. It is a niche with a good repayment record that a number of businessmen have found. I regret not picking up EQB stock in 2020 but I already was disproportionate in financials.
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