CDPQ to partially dispose $300M CGI shares

CGI Group Inc. (TSX: GIB.A; NYSE: GIB) intends to enter into a private agreement with Caisse de dépôt et placement du Québec (CDPQ) for the repurchase for cancellation of 4,854,368 of its Class A subordinate voting shares held by CDPQ for a price of $61.80 per Class A Share, which represents a discount to today’s closing price of the Class A Shares on the Toronto Stock Exchange (TSX).

The transaction will be made in connection with the periodic portfolio rebalancing of CDPQ. Following the sale, CDPQ will continue to hold approximately 46.2 million Class A Shares, representing approximately 16% of CGI’s total outstanding shares.

CDPQ will continue to be the largest Class A shareholder, ahead of Fidelity, BlackRock, Invesco. Serge Godin, founder and Executive Chairman of CGI, is the largest shareholders with approximately 48% of voting through his CGI Class B shareholding.

“La Caisse rebalances its portfolio periodically, during the right conditions, to ensure our depositors capture the benefits from our portfolio’s gains. CGI has delivered excellent results for its shareholders, and this transaction is an opportunity to monetize a portion of our investment in the company,” said Christian Dubé, Executive Vice-President, Québec, of la Caisse. “We will continue to remain a significant shareholder of CGI, as we believe this important information technology leader is well-positioned to grow and succeed in the long-term.”

“This transaction is immediately accretive and consistent with our value creation strategy, prioritizing the use of cash based on the highest return opportunities,” said George D. Schindler, President and Chief Executive Officer, CGI. “We remain very well positioned to continue executing our Build and Buy profitable growth strategy through our strong cash flow generation and access to our credit facility.”

A favourable decision was obtained from the Autorité des marchés financiers to exempt CGI from the issuer bid requirements under securities legislation applicable to the transaction, which will be made at a discount in accordance with the decision and is expected to be entered into later today and settled on September 19, 2017.

The share repurchase will be made under CGI’s normal course issuer bid (NCIB), the renewal of which was announced on February 1, 2017. Under the NCIB, CGI is authorized to repurchase up to 21,190,564 Class A Shares by February 5, 2018. The NCIB allows for purchases outside the facilities of the TSX by private agreements pursuant to exemption orders issued by securities regulatory authorities. As at September 13, 2017, 8,827,200 shares had been repurchased under the NCIB.

photo credit: CGI Group Inc.

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.