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Fairfax Financial buys stake in Hamilton’s Stelco

Fairfax Financial has spent roughly $250 million to grab a 13.7 per cent stake in Hamilton's Stelco.
Fairfax Financial has spent roughly $250 million to grab a 13.7 per cent stake in Hamilton's Stelco. 900 CHML file photo

Fairfax Financial Holdings Ltd. says it has bought a 13.7 per cent stake in Hamilton steel producer Stelco Holdings Inc. for roughly $250 million.

The insurance-focused financial services company says it has acquired 12.2 million common shares of the Hamilton company for $20.50 each.

READ MORE: Stelco revenue up 84% from last year despite steel tariffs

That price represents a 4.2 per cent premium to Stelco’s closing price of $19.67 on Friday.

Stelco Holdings owner Bedrock Industries says it sold the shares to Fairfax and its subsidiaries via a private share purchase agreement.

READ MORE: Stelco owners, union reach deal on pension plan

Bedrock now holds roughly 46.4 per cent of Stelco’s outstanding common shares, down from 60.1 per cent before the sale.

Stelco’s chief executive Alan Kestenbaum says Fairfax’s investment “represents a vote of confidence in our future.”

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