Genworth MI Canada Inc., which runs the largest Canadian private residential mortgage insurer under the Sagen MI Canada brand, has reached an agreement to sell the remaining value of its company to real estate service provider Brookfield Business Partners for approximately CA$1.6 billion.
According to a Reuters report, Brookfield already owns 57% of the insurer. In the deal signed on Monday (October 26), the firm has agreed to pay $43.50 per share for the remaining shares in Genworth. This marks a premium of around 22% to the stock’s last closing price of $35.58 on the Toronto Stock Exchange on Friday.
Brookfield announced in a statement that it will fund about $460 million of the purchase price, with the remaining sum being covered by its institutional partners. In order to close, the deal needs a two-thirds majority vote of approval by Genworth shareholders. As Reuters reports, it also requires approval by a simple majority of votes cast by minority shareholders, which does not include Brookfield.
Genworth MI Canada rebranded earlier in October to operate under the Sagen MI Canada brand. This followed an announcement in July in which the insurer said it would not alter its underwriting policy for debt service ratio limits, minimum credit score and down-payment requirements amid the dire economic straits caused by the COVID-19 pandemic.
Some mortgage insurers did start tightening their belts and restricting their underwriting policies earlier in the year after predicting declines in home prices because of the pandemic-induced recession.
