31 August 2014

Fairfax Moves to Acquire Pethealth Inc

FAIRFAXFairfax Financial Holdings Limited has moved to acquire all of the outstanding common and preferred shares of Pethealth Inc for 100 million in cash. The Fairfax announcement appeared after the Toronto Stock Exchange closed on Friday, afternoon.

Read the Fairfax release

The acquisition follows quickly on the heels of recent reports that Pethealth was available for sale. Based on recent valuations of the company it appears Fairfax has paid a premium to own these assets. 

Pethealth shares were listed at $2.21/share when the TSE closed on Friday. The Fairfax offer is pegged at $2.79/share, well above the $2.50 valuation recommended by Industrial Alliance Securities analyst, Fred Westra

Although the Fairfax transaction was reported in the media and on the Fairfax site, the reporting of the transaction is absent from the Pethealth site. In reporting the transaction, Fairfax, noted that Mark Warren, the founder of Pethealth, had voted against recommending acceptance of the offer.

Fairfax is a financial services holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management. Prem Watsa the founder of Fairfax is likely remembered by most for a bid to acquire Blackberry, however, he is an investor that has often recognized value where others haven't. 

This Fairfax acquisition will bear watching as the deal completes during the 4th quarter and new Pethealth strategies become evident.

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