By Ketki Saxena
Investing.com-- President and CEO of Canaccord Genuity Group Inc (TSX:CF)., Dan Daviau, revealed that a proposed management buyout plan for the financial services company could not proceed as it would fail to secure necessary regulatory approvals.
In an interview BNN Bloomberg, Daviau stated that the $1.1-billion deal was ultimately abandoned last week when no extension was granted beyond the June 13 deadline. He emphasized the heavily regulated nature of their business.
"We are a heavily regulated business," he said. "We’ve got 13 different regulators that look at us."
An issue arose in one of their foreign subsidiaries which, while not posing an existential threat to the company, would still prevent them from obtaining approval for a change of control.
Daviau chose not to provide further details about this roadblock due to legal advice.
"It’s not tangible enough yet to be able to speak intelligently about it," he explained.
He added that they decided to inform the market about this development even though it wasn't highly significant because it was affecting their bid process:
"We communicated it to the market, not because it was so material, but because it was affecting our bid."