Worried about Canada Life preferred shares

Question: I purchased some Canada Life preferred shares for income. Now the company is the target of a hostile takeover bid from Manulife. What happens to my preferred shares if the ownership of Canada Life changes? – B.M., Cambridge, ON


In a word, nothing. In a takeover deal, the buyer assumes the obligations of the company being purchased. Your preferreds are safe until maturity or until the first redemption date, if there is one. If Manulife wanted to acquire them sooner, it would have to make a bid to the shareholders, which you could accept or not. – G.P.