UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign
Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of: May 2024 |
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Commission File Number: 001-31556 |
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FAIRFAX FINANCIAL
HOLDINGS LIMITED
(Name of Registrant)
95 Wellington Street West
Suite 800
Toronto, Ontario
Canada M5J 2N7
(Address of Principal Executive Offices)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
EXHIBIT INDEX
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
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FAIRFAX FINANCIAL HOLDINGS LIMITED |
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Date: May 13, 2024 |
By: |
/s/ Derek Bulas |
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Name: |
Derek Bulas |
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Title: |
Vice President, Chief Legal Officer and Corporate Secretary |
Exhibit 99.1
FAIRFAX News Release
TSX Stock Symbol: FFH and FFH.U
TORONTO, May 13, 2024
FAIRFAX ANNOUNCES
PURCHASE OF 275,000 SUBORDINATE VOTING SHARES FOR CANCELLATION FROM CHAIRMAN AND CEO, PREM WATSA
Fairfax Financial
Holdings Limited (TSX: FFH and FFH.U) (“Fairfax”) announces that it has repurchased 275,000 subordinate voting shares (the
“Purchased Shares”) for cancellation from its Chairman and Chief Executive Officer, Prem Watsa. The Purchased Shares are
being repurchased by Fairfax at price of C$1,512.89 (the “Purchase Price”), or US$1,106.48, per share at an aggregate cost
of approximately US$304.3 million. The Purchased Shares were acquired pursuant to an exemption from the issuer bid requirements contained
in applicable Canadian securities laws, and as required by the applicable exemption, the Purchase Price does not exceed the simple average
closing price of the subordinate voting shares on the Toronto Stock Exchange (the “TSX”) for the 20 trading days immediately
preceding the date of acquisition. The Purchase Price represents a discount of approximately 3.7% to the closing price of the subordinate
voting shares on the TSX on May 10, 2024.
The transaction
was reviewed and unanimously approved by the independent directors of Fairfax. Management of Fairfax believes that the repurchase of
the Purchased Shares is accretive to all shareholders of Fairfax as the trading price of the subordinate voting shares on the TSX does
not reflect the underlying value of the subordinate voting shares.
As of the date
hereof, pursuant to its existing normal course issuer bid and not including the Purchased Shares, Fairfax has repurchased for cancellation
354,761 subordinate voting shares in 2024 at an aggregate cost of US$383.8 million, and Fairfax expects to continue to repurchase shares
for cancellation under its normal course issuer bid for as long as it continues to believe that the trading price for its subordinate
voting shares does not properly reflect the intrinsic value of those shares.
“As previously
announced in 2020, I purchased in the market an additional 482,600 subordinate voting shares of Fairfax at a price of US$308 per share,
or approximately US$150 million in total. At the time, I believed, and I said publicly, that the trading price for Fairfax shares was
ridiculously cheap and very significantly below intrinsic value, and I was acquiring these shares as an investment. Even though I believe
our shares continue to trade well below intrinsic value, I decided to sell a portion of the shares I acquired in 2020, representing only
a small portion of my total holdings of Fairfax, for estate planning reasons. As a controlling shareholder, my salary has been fixed
at C$600,000, and I have never had a cash bonus nor received any shares as compensation for decades. I continue to control the 1,548,000
outstanding multiple voting shares and 519,828 subordinate voting shares of Fairfax, representing greater than 90% of my net worth, and
I am not contemplating further sales. As I have said many times, Fairfax is not for sale, and I am confident that our future is very
bright. As always, the best is yet to come,” said Prem Watsa, Chairman and Chief Executive Officer of Fairfax.
The
transaction constitutes a “related party transaction” for purposes of Multilateral Instrument 61-101 – Protection
of Minority Security Holders in Special Transactions (“MI 61-101”), as Prem Watsa is an insider of Fairfax. Fairfax
is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101 as the
fair market value of the transaction is not more than 25% of Fairfax’s market capitalization.
FAIRFAX
FINANCIAL HOLDINGS LIMITED
95
Wellington Street West, Suite 800, Toronto, Ontario, M5J 2N7 Telephone: 416-367-4941 Facsimile: 416-367-4946
Fairfax is a holding
company which, through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance and the associated investment
management.
For
further information contact: John Varnell, Vice President, Corporate Development at (416) 367-4941
Certain statements
contained herein may constitute forward-looking statements and are made pursuant to the “safe harbour” provisions of the
United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities regulations. Such forward-looking
statements are subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or
achievements of Fairfax to be materially different from any future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, but are not limited to: our ability to complete acquisitions and other strategic transactions
on the terms and timeframes contemplated, and to achieve the anticipated benefits therefrom; a reduction in net earnings if our loss
reserves are insufficient; underwriting losses on the risks we insure that are higher than expected; the occurrence of catastrophic events
with a frequency or severity exceeding our estimates; changes in market variables, including unfavourable changes in interest rates,
foreign exchange rates, equity prices and credit spreads, which could negatively affect our operating results and investment portfolio;
the cycles of the insurance market and general economic conditions, which can substantially influence our and our competitors’
premium rates and capacity to write new business; insufficient reserves for asbestos, environmental and other latent claims; exposure
to credit risk in the event our reinsurers fail to make payments to us under our reinsurance arrangements; exposure to credit risk in
the event our insureds, insurance producers or reinsurance intermediaries fail to remit premiums that are owed to us or failure by our
insureds to reimburse us for deductibles that are paid by us on their behalf; our inability to maintain our long term debt ratings, the
inability of our subsidiaries to maintain financial or claims paying ability ratings and the impact of a downgrade of such ratings on
derivative transactions that we or our subsidiaries have entered into; risks associated with implementing our business strategies; the
timing of claims payments being sooner or the receipt of reinsurance recoverables being later than anticipated by us; risks associated
with any use we may make of derivative instruments; the failure of any hedging methods we may employ to achieve their desired risk management
objective; a decrease in the level of demand for insurance or reinsurance products, or increased competition in the insurance industry;
the impact of emerging claim and coverage issues or the failure of any of the loss limitation methods we employ; our inability to access
cash of our subsidiaries; an increase in the amount of capital that we and our subsidiaries are required to maintain and our inability
to obtain required levels of capital on favourable terms, if at all; the loss of key employees; our inability to obtain reinsurance coverage
in sufficient amounts, at reasonable prices or on terms that adequately protect us; the passage of legislation subjecting our businesses
to additional adverse requirements, supervision or regulation, including additional tax regulation, in the United States, Canada or other
jurisdictions in which we operate; risks associated with applicable laws and regulations relating to sanctions and corrupt practices
in foreign jurisdictions in which we operate; risks associated with government investigations of, and litigation and negative publicity
related to, insurance industry practice or any other conduct; risks associated with political and other developments in foreign jurisdictions
in which we operate; risks associated with legal or regulatory proceedings or significant litigation; failures or security breaches of
our computer and data processing systems; the influence exercisable by our significant shareholder; adverse fluctuations in foreign currency
exchange rates; our dependence on independent brokers over whom we exercise little control; operational, financial reporting and other
risks associated with IFRS 17; tax risks associated with amendments to IAS 12; impairment of the carrying value of our goodwill, indefinite-lived
intangible assets or investments in associates; our failure to realize deferred income tax assets; technological or other change which
adversely impacts demand, or the premiums payable, for the insurance coverages we offer; disruptions of our information technology systems;
assessments and shared market mechanisms which may adversely affect our insurance subsidiaries; risks associated with the conflicts in
Ukraine and Israel and the development of other geopolitical events and economic disruptions worldwide; and risks associated with recent
events in the banking sector which have elevated concerns among market participants about the liquidity, default, and non-performance
risk associated with banks, other financial institutions and the financial services industry generally. Additional risks and uncertainties
are described in our most recently issued Annual Report, which is available at www.fairfax.ca, and in our Base Shelf Prospectus
(under “Risk Factors”) filed with the securities regulatory authorities in Canada, which is available on SEDAR+ at www.sedarplus.ca.
Fairfax disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable securities law.
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