CIBC adviser pushes Extendicare for C$100 million special dividend
By John Tilak
TORONTO (Reuters) - A CIBC Wood Gundy investment adviser is pushing Extendicare Inc EXE.TO, a Canadian operator of senior care centers, to pay a special dividend of at least C$100 million ($80.70 million) and make other changes following the sale of its U.S. business.
Markham, Ontario-based Extendicare has been narrowing its geographic focus to long-term senior care centers in Canada. It announced a deal in November to sell its U.S. business for $870 million.
Murray Bockhold, an investment adviser at CIBC Wood Gundy, said in an interview that following the sale of its U.S. business, Extendicare should return excess capital to shareholders through the C$100 million special dividend.
He also wants the company to buy back C$100 million in shares and revamp its board.
Brokerage CIBC Wood Gundy, a unit of Canadian Imperial Bank of Commerce (CM.TO: Quote), oversees about 2 percent of Extendicare stock on behalf of clients, Bockhold said.
He said Extendicare's board should be shrunk to seven from nine directors, and that it should recruit members with greater expertise.
"The board needs changing," he said. "We need to get some new blood in there."
Bockhold called for some of these changes in a June 18 letter addressed to board Chairman Ben Hutzel that has been viewed by Reuters. Continued...