Author: Mathieu Dion and Christine Dobie
(Bloomberg) — Laurentian Bank of Canada has reached a deal to sell itself to Fairstone Bank for $1.9 billion and will spin off its retail banking unit to focus on commercial lending.
Fairstone will pay $40.50 per share in cash, a 20% premium to Monday’s closing price. National Bank of Canada, Canada’s sixth-largest bank, will acquire all of Laurentian’s retail and small business assets and liabilities pending completion of the deal, according to a statement Tuesday.
The three-way deal will resolve long-term questions about Laurentian’s future. Laurentian is a small Montreal-based bank that has struggled to keep up with larger rivals in banking technology. Two years ago, the board conducted a strategic review but ultimately failed to find a buyer. A major technical glitch and the sudden departure of the CEO followed.
Fairstone is an alternative mortgage lender that also offers a variety of other financial products. The company has a small number of shareholders, but announced in January that Smith Financial Corp., owned by Canadian billionaire Stephen Smith, had secured a majority of the voting rights. Firestone said at the time that Centerbridge Partners and the Ontario Teachers Pension Plan Board were minority shareholders.
The deal is backed by the Caisse de Depot et Placement du Quebec, Laurentian’s largest shareholder with about 8% of the shares, according to data compiled by Bloomberg. “Our support is based on the fact that the proposed offer comes with guarantees regarding the maintenance of Laurentian Bank’s local commercial headquarters and the relocation of Firestone Bank’s headquarters to Montreal,” said Kim Thomassin, the pension fund’s head of Quebec.
Firestone said in a statement that the deal will expand “the scale and accelerate growth of commercial real estate across the country, particularly in Quebec.”
Éric Provost will continue to serve as Laurentian’s CEO upon completion of the transaction, which is expected to close by the end of next year, subject to regulatory approvals.
Laurentian’s retail loans and deposits were $3.3 billion and $7.6 billion, respectively, while small business loans and deposits totaled $1.4 billion.
The national bank will not take over any branches or employees of Laurentian Bank, and all Laurentian Bank branches in Quebec will eventually close.
“National Bank would benefit not only by gaining scale in the provinces where it operates, but also by not having to deal with the legacy issues associated with the Larentine branch system,” Jefferies analyst John Aiken said in a note to clients. “Having assets, deposits and mutual funds at book value is simply the icing on the cake.”
NAB, which will have 13 times Laurentian’s revenue in fiscal 2024, expects the deal to be 1.5% to 2% accretive to adjusted earnings per share, which “seems reasonable while being beneficial to return on equity in the first year after closing,” said Paul Gulberg, an analyst at Bloomberg Intelligence.
National also bought Canadian Western Bank for $5 billion earlier this year, giving it a larger footprint in the western provinces of Alberta and British Columbia.
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Last modified: December 2, 2025
