Great-West Life

Strategic Concepts & Mechanics

Strategic PatternFlanking Around Entrenched Giants Identity & CultureLoyalty Bought with Friday Paychecks Relationship LeverageBoard Seats as Reconnaissance Posts Cornerstone MoveSell the Company to Itself — Internal Reverse Takeovers Competitive AdvantageClassified Stock as Control Multiplier Cornerstone MoveFind the Key Man and Close Before Combat Operating PrincipleCash Business Preference from Bus Roots Strategic PatternConcentrated Diversity Over Grab-Bag Portfolios Signature MoveWin Small, Consolidate, Then Leap Geometrically Signature MoveWallpaper-Roll Planning Then Relentless Pressure Cornerstone MoveBuy Cheap Shells, Strip and Reload the Portfolio Operating PrinciplePool-of-Light Negotiation Theater Relationship LeveragePolitical Access Without Political Office Signature MoveDebt as Temporary Tool, Never Permanent Foundation Capital StrategyDividends as Upward Cash Escalator Signature MoveChief of Staff Handles Architecture, Boss Handles Vision Decision FrameworkAcquire Capacity, Never Build in Inflation Signature MovePocket the Stake, Play with Winnings Only

Primary Evidence

"The plan’s many parts fell into place in late February, 1969. It worked this way: 1. Investors would purchase 194,000 shares (19.4 percent) in Great- West Life from Great West Saddlery at $140. 2. If Saddlery accepted, Power Corp. and Canadian Pacific Invest¬ ments (cpi) would provide funds for Investors to buy a further 307,000 Great-West Life shares from all shareholders. 3. Investors would pay back Power and Canadian Pacific by issuing 3 million Investors common shares at $12 each and 1.6 million preferred shares at $25 each. 4. If Investors couldn’t acquire those 307,000 additional shares, Power and cpi would buy the 194,000 shares purchased from Saddlery. In late February, Investors offered $140.29 cash per share to Sad¬ dlery. The offer was accepted. The same offer was presented to the Great-West board as the one that would be made to shareholders. The board examined the offer and informed the shareholders that the $140 per share suggested by Investors was fair. Investors then offered to purchase 307,000 shares"

Source:Rising to Power - Paul Desmarais & Power Corporation

"At the end of April, Investors issued 3,000,000 voting common shares to the parties that provided $36 million of the financing for the Great-West share purchases: Power Corp., Canadian Pacific Investments, James Richardson & Sons, Canadian Imperial Bank of Commerce, the Royal Bank of Canada and Peter D. Curry (one of Power’s senior executives and a key Desmarais advisor). Then, in early May, Investors offered 1,600,000 cumulative redeemable convertible preferred shares at $25 each to raise the remainder of the financing costs. By the end of the transaction, Investors owned 50.1 percent of Great-West Life bought for $70.8 million (including costs). In turn, Investors issued stock worth $76 million to finance the acquisition and its costs. Also, 10 percent of Investors had been acquired by Great-West, one of the conditions of acceptance championed by Kil- gour, so that Great-West wouldn’t appear simply to have been ab¬ sorbed by Investors. And Desmarais, through Gelco’s control of Power, which had 30.1 percent of Investors, was in an influential position to guide Great-West Life in new, profitable directions."

Source:Rising to Power - Paul Desmarais & Power Corporation

Appears In Volumes

Rising to Power - Paul Desmarais & Power Corporation