Billionaire Smith Haggled Home Capital Price Down as Rates Rose
- Board accepted C$1.7 billion proposal after seeking richer bid
- Board turned down C$44-a-share offer, then accepted it later
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For prospective Canadian homebuyers, last year’s housing slump knocked about $72,000 off the price of a typical home. For billionaire Stephen Smith, who bought one of the country’s biggest alternative home lenders, it may have saved more than $200 million.
Smith first offered to buy Home Capital Group Inc. for C$44 a share last April, but the lender’s board asked for C$47 a share instead, according to a regulatory filing released Tuesday. Then, rapidly-rising rates tanked the housing market, eroding the company’s profitability and share price. Directors eventually came around to accepting Smith’s original bid — even though, by that time, the firm had fewer shares outstanding.