Laurentian Bank files circular for special meeting

Executive Summary

• Laurentian Bank of Canada has filed its management proxy circular for a special meeting of shareholders scheduled for February 5, 2026, to approve a definitive acquisition agreement.
• Fairstone Bank of Canada will acquire all outstanding common shares of Laurentian Bank for $40.50 per share in cash, representing a total consideration of approximately $1.9 billion.
• The transaction includes a parallel agreement where National Bank of Canada acquires Laurentian Bank's retail and SME banking sectors, while Fairstone Bank acquires the remaining shares, allowing Laurentian to maintain its brand and head office in Quebec.

Key Details

• Transaction Structure:
  • Share Acquisition: Fairstone Bank of Canada (Schedule I bank) enters a definitive agreement to acquire all issued and outstanding common shares of Laurentian Bank.
  • Asset Acquisition: National Bank of Canada (directly or through affiliates) enters a definitive agreement to acquire certain assets and assume certain liabilities related to Laurentian Bank's retail and SME banking sectors.
• Consideration:
  • Price per Share: $40.50 in cash.
  • Total Value: Approximately $1.9 billion.
  • Premiums: Represents a ~20% premium over the closing price of $33.76 (Dec 1, 2025) and a ~22% premium over the 20-day VWAP.
• Meeting Details:
  • Date: February 5, 2026, at 9:30 a.m. Eastern Time.
  • Format: Virtual via live webcast and in-person at LUMI, Montreal.
  • Record Date: December 23, 2025.
• Strategic Terms & Commitments:
  • Head Office: Fairstone Bank agrees to maintain Laurentian Bank's head office in Quebec and move its own head office to Quebec on or prior to closing.
  • Brand: Laurentian Bank will maintain its brand identity.
  • Dividends: Laurentian Bank expects to continue declaring and paying regular quarterly cash dividends prior to closing.
• Support & Fairness:
  • Board Recommendation: Unanimous recommendation by the Board and the Special Committee of Independent Directors to vote in favor.
  • Fairness Opinions: Received from J.P. Morgan (lead financial adviser) and Blair Franklin Capital Partners Inc. (independent financial adviser to the special committee) as of Dec 2, 2025.
  • Voting Agreements: La Caisse (holding ~8% of shares) and directors/executives (holding <1%) have entered into voting agreements to support the transaction.
• Rationale:
  • Provides immediate liquidity and certainty of value to shareholders.
  • Mitigates disruption to retail/SME clients by transferring them to National Bank's enhanced offerings.
  • Allows Laurentian to grow its specialized commercial business.

Notable Quotes

• "The board of directors of Laurentian Bank unanimously recommends that shareholders vote in favour of the transaction resolution by voting for."
• "Joining forces with Fairstone Bank will allow Laurentian Bank to grow its specialized commercial business, while maintaining its brand identity and head office in Montreal, where it was founded over 175 years ago."