Aug 15 (Reuters) - Canada's Home Capital Group Inc
said on Monday that its board had rejected an unsolicited
takeover bid from an unnamed buyer as it undervalued the
The Toronto-based company did not disclose the exact price,
but said it exceeded C$28.60 per share the maximum price it
was offering its shareholders for a stock buyback it had
announced earlier this month.
The company said this was the second time the buyer had made
an offer and that the first one was made with a partner.
Shares of Home Capital were up nearly 4% at C$29.54
($22.87) on Monday. As of last close, they had fallen 27% this
year and were trading below book value.
Earlier this month, the company reported a drop in
second-quarter profit, highlighting the turmoil in the Canadian
housing market due to rising cost of mortgages.
Ultra-low borrowing costs and pandemic-related stimulus
measures contributed to a more than 50% rise in average home
prices in Canada over the last two years.
Warren Buffett's Berkshire Hathaway Inc extended a
lifeline to Home Capital in 2017, buying a 20% stake and
offering a C$2 billion credit line after the company's investors
withdrew more than 90% of funds from its high-interest savings
($1 = 1.2919 Canadian dollars)
(Reporting by Niket Nishant and Mehnaz Yasmin in Bengaluru;
Editing by Shinjini Ganguli and Anil D'Silva)