Saxon Financial profit falls on one-time charge

Wed Aug 6, 2008 12:14pm EDT
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TORONTO (Reuters) - Investment manager Saxon Financial Inc SFI.TO, which is the subject of a friendly takeover offer from larger Canadian fund manager IGM Financial IGM.TO, posted a 46 percent drop in second quarter earnings on Wednesday due to a one-time charge.

The company said net income in the three months to June 30 was C$2.5 million ($2.4 million), or 18 Canadian cents a share, down from C$4.6 million or 34 Canadian cents a share, in the same 2007 period.

Results were hurt by a C$2.2 million nonrecurring item related to the departure of the Saxon Financial's former president and chief executive.

Excluding that charge, earnings per share would have been about 30 Canadian cents for the quarter, the company said.

Management fee revenue fell 10 percent year-over-year to C$12.8 million, but was up from C$12.3 million in the previous quarter.

IGM and Saxon said on Tuesday that IGM will make a C$21 per share cash offer for Saxon, valuing the company at about C$287 million. Saxon shareholders owning about 45 percent of outstanding shares have agreed to the IGM offer, which must be accepted by shareholders owning 66.7 percent of the shares.

On the Toronto Stock Exchange at midday on Wednesday, Saxon Financial shares were up 10 Canadian cents at C$20.92. IGM Financial stock was down 82 Canadian cents at C$43.67 a share.

Saxon Financial's three principal businesses are Saxon Funds Management Ltd, which manages mutual funds; Howson Tattersall Investment Counsel Ltd, an institutional asset manager; and Howson Tattersall Private Asset Management, which manages private client assets.

($1=$1.05 Canadian)

(Reporting by Lynne Olver; Editing by Peter Galloway)