Laurentian Bank of Canada said on Jan. 26, 2026, that the two leading proxy advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis, both recommend shareholders vote in favour of the bank’s plan to sell its commercial operations to Fairstone Bank of Canada for $1.9 billion.
The breakup of Laurentian takes shape
The transaction is the centrepiece of a breakup of the Montreal-based bank, Canada’s ninth-largest. Fairstone Bank has agreed to acquire Laurentian’s commercial banking operations for $1.9 billion, or $40.50 per share, while National Bank of Canada is buying Laurentian’s retail and small and medium business segment for roughly book value.
The deal is subject to approval by a two-thirds majority vote of Laurentian Bank shareholders. The bank’s special meeting of shareholders to vote on the transaction is set for Feb. 5.
Recommendations from ISS and Glass Lewis carry weight with institutional investors, who often follow the advisory firms’ guidance on mergers and governance votes. With both firms recommending in favour, the bank cleared one of the expected hurdles on the way to the February vote.
Fairstone has committed to keeping Laurentian’s commercial banking employees on for at least a year after the deal closes — a commitment watched closely in Montreal, where Laurentian is headquartered and where its commercial lending business is rooted.
What shareholders are being asked to bless
The transaction would dismantle Laurentian as a standalone bank. Its commercial operations — the business lending arm Fairstone is buying for $1.9 billion, priced at $40.50 a share — would move to Fairstone Bank of Canada, the former Duo Bank, which has grown into one of the country’s largest non-bank lenders. Its retail and small and medium business segment would go to National Bank of Canada for roughly book value, extending National’s reach after its expansion in Western Canada.
The two-thirds threshold is the standard for plans of arrangement of this kind, and it is why the proxy advisers’ recommendations, published ahead of the meeting, matter to the outcome: large institutional shareholders and the firms that advise them typically decide whether such a vote is a formality or a fight. With both ISS and Glass Lewis recommending in favour, Laurentian entered the final stretch of the campaign for the Feb. 5 vote with the wind at its back.
Laurentian has been searching for a path forward for some time. The bank, long the smallest of Canada’s chartered banks with a primarily Quebec footprint, has spent recent years restructuring, cutting costs and reviewing its strategic options in a market dominated by the Big Six. The two-part sale — commercial to Fairstone, retail and small business to National — was the answer its board ultimately put to shareholders.
A disclosed conflict in the fine print
The Glass Lewis recommendation came with a disclosure that drew attention in coverage of the announcement: Stephen Smith, the chairman of Fairstone Bank, is also one of Glass Lewis’s owners and the chair of its board of directors.
Proxy advisers operate policies to manage such conflicts, and Glass Lewis’s recommendation was one of two — ISS also recommended in favour — but the overlap illustrates the scrutiny applied to advisory firms when a deal involves their own leadership’s interests.
For Laurentian, founded in 1846 as the Montreal City and District Savings Bank, the votes in February will decide the end of its nearly 180-year run as an independent institution — its commercial book going to Fairstone, its retail and small-business customers to National Bank, in a consolidation that reshapes Quebec banking.
