Canadian Common Share IPOs: A New Path To Liquidity For U.S. Businesses

On May 17, 2007, Northstar Healthcare Inc. completed the first Canadian initial public offering of high dividend common shares by a U.S. business. Listed on the Toronto Stock Exchange, Northstar was formed to indirectly acquire and/or manage ambulatory surgery centres in the United States, focusing initially on Houston and other metropolitan areas in Texas.

This offering generated tremendous interest from both retail and institutional investors. While high dividend common shares appeal to the yield-oriented investors that fuelled the growth of Canadian income funds since 2000, the common share structure also attracted institutions that were not active investors in income funds. With the growth of the income fund sector curtailed by proposed taxation and a wave of privatizations, high dividend common shares are in strong demand in Canada.