Sunday, September 5, 2010 5:18 PM EDT
ISS's controversial M&A role
Boyd Erman
Institutional Shareholder Services' recommendation that shareholders of Kinross Gold Corp vote down the miner's proposed purchase of Red Back Mining Inc. for about $7-billion has put the spotlight on the research firm.
After all, the analyst who wrote the recommendation is the same one who argued that shareholders of Magna International Inc. vote for a controversial deal to buy out the super-voting shares of Magna founder Frank Stronach in a transaction that cost Magna shareholders about $1-billion.
Link to this postFriday, September 3, 2010 2:57 PM EDT
CIBC hires two I-bankers in Beijing
Boyd Erman
All the talk of a potential counterbid for Potash Corp. of Saskatchewan Inc. emerging from China has put a focus on just how important it is for Canadian investment banks to have a presence in the country.
Canadian Imperial Bank of Commerce's wholesale banking and securities business today announced two hires in Beijing for its oil and gas and mining practice, going straight for what are expected to be the busiest sectors on the Canada-China deal axis.
Friday, September 3, 2010 12:49 PM EDT
Comparing the Goldcorp and Kinross takeovers
Tim Kiladze
Goldcorp Inc.’s G-T overnight bid for Andean Resources Ltd. AND-T came as a surprise to some people Friday morning, but its initial shock value didn’t match that of Kinross Gold Corp.’s K-T $7.1-billion bid for Red Back Mining Inc. RBI-T, which could be in trouble. (The lower shock could have something do with today being the Friday before a long weekend and some people have mentally checked out.)
With two major gold deals in a month, it makes sense to put the transactions side by side to compare metrics.
Friday, September 3, 2010 7:58 AM EDT
Morning Meeting: Goldcorp pounces on Andean
Welcome to the Streetwise Morning Meeting, a look at some must-read news on deals and deal makers.
Goldcorp quickly trumps Eldorado for Andean
That was fast. Goldcorp. Inc. needed just hours to beat Eldorado Gold's bid for Andean Resources Ltd., an Australian miner that's listed on the Toronto Stock Exchange. Goldcorp.'s friendly deal envisages paying $3.6-billion in cash and shares for Andean. The counterbid was so fast that one suspects that when the circular with the background to the offer comes out, investors will find out that Goldcorp has been pursuing Andean for some time.
The two Vancouver companies were vying for Andean and its Cerro Negro gold project in Argentina, a contest that marks yet another battle by Goldcorp to gain control of a desired asset and a long pursuit by Eldorado, writes Brenda Bouw, the Globe and Mail's very busy mining reporter.
For those keeping score, BMO Nesbitt Burns is advising Andean, with CIBC on for Goldcorp. GMP Securities is advising Eldorado.
IIROC reviews Alpha trading plan
The Investment Industry Regulatory Organization of Canada is looking into a plan by some of the banks backing the Alpha trading system to shift premarket orders to Alpha. It's an early-stage review "for information purposes" at this point, according to the letter the regulator sent to the banks asking for information on the plan, but it comes amid a heightened focus by IIROC on ensuring that investors get the best price now that Canada's new multimarket environment is up and running.
AIA heads for IPO
Manulife Financial Corp. may yet get a shot at owning AIG's Asian unit, known as AIA. Manulife has long lusted after AIA, which would hugely bulk up the Canadian company's presence in the region, but doesn't have the wherewithal to buy it now. Instead of selling it to someone else, it appears that AIG is going ahead with and initial public offering that could raise as much as $15-billion (U.S.) and leave AIA shares listed in Hong Kong. As a publicly traded company, AIA could someday be a target for a resurgent Manulife.
HSBC warns it could leave London
HSBC PLC, a London institution, has warned the British government that all that history will not matter if the country goes ahead on recommendations to break up super-big banks. If that happens, HSBC said it will move out of London. Barclays and Standard Chartered have hinted they would move to the U.S., the Financial Times said, but HSBC would most likely head for Hong Kong.
Xstrata backs out of Noranda Income Fund bid
Noranda Income Fund's future is now even more up in the air after Xstrata PLC backed out of a plan to buy the remaining publicly traded shares in the smelter operator that it didn't already own. There's a proxy battle brewing at the fund, with two big activist shareholders, Roland Keiper's Clearwater Capital and Greg Boland's West Face Capital, requisitioning a shareholder meeting to try to throw out some of the fund's board.
Thursday, September 2, 2010 7:00 PM EDT
Capital Libre! at TD
Grant Robertson
With Canadian banks sitting on a pile of surplus capital as they await new global banking rules this fall, one of the big guessing games is when they will move to increase their dividends.
Investors are understandably impatient, having gone through at least two years of no increases as the banks amassed capital, agreeing not to deploy it towards dividend hikes or share buybacks until they knew what new rules will say.
Toronto Dominion Bank TD-T chief Ed Clark waded into the discussion Thursday.
Thursday, September 2, 2010 12:08 PM EDT
Smaller Canadian banks in good shape
Tim Kiladze
The third-quarter performance of Canada’s Big Six banks can be summarized as follows: personal and commercial divisions good, capital markets segments bad.
Because the country’s smaller banks have minimal exposure to the latter, they posted solid third-quarter profits.
Thursday, September 2, 2010 11:27 AM EDT
Debt investors happy August is behind them
Tim Kiladze
August was a month to remember for anyone tied to fixed-income markets -- even though the memories may not be so fond.
Uncertainty about the U.S. economy’s future weighed heavily on bonds, and Treasury yields fell significantly. That affected corporate securities, and in mid-August Johnson & Johnson set a new record for the lowest new issue coupons, according to Thomson Reuters. The $1.1-billion (U.S.) 10-and-30-year investment grade bonds paid 2.95 per cent and 4.5 per cent, respectively.
Thursday, September 2, 2010 7:47 AM EDT
Morning Meeting: Kinross answers deal questions
Boyd Erman
Welcome to the Streetwise Morning Meeting, a look at some must-read news on deals and deal makers.
Kinross answers ISS question
A rumour made the rounds earlier this week that Kinross Gold. Corp. might not get the backing of proxy research firm Institutional Shareholder Services for the planned buyout of Red Back Mining Inc. The result was a widening in the arbitrage spread between the bid price and Red Back shares, signalling a bit of nervousness that the transaction would fall apart.
ISS is an important part of getting approval for the deal, because many big money managers such as index funds follow its voting recommendations. Kinross needs the approval of a majority of its shareholders to go ahead with the acquisition.
Well, it turns out the rumour might not have been totally off base. Later in the day Wednesday, Kinross said that ISS had wanted more information. The firm asked for more information about the deal. In its updated disclosure at the request of ISS, Kinross laid out how much due diligence the gold miner's board did on Red Back as well as its plans for one of Red Back's African mining sites.
It will be interesting to watch Thursday's trading to see if Kinross's answer puts the market's worries to rest, or whether the fact that ISS wanted more detail is taken as a signal of trouble.
Saskatchewan says no to Chinese bids for Potash
Bad news for all those bankers making the pilgrimage to China to seek a counterbidder for Potash Corp. of Saskatchewan Inc.: The Saskatchewan government says it won't support a bid for the fertilizer producer from a sovereign wealth fund or a Chinese state-owned company because it would clash with the interests of the taxpayers in the province, where the company is based and most of the potash resources are. Saskatchewan's budget gets a big boost from potash production royalties, so the province wants to keep prices high and stable.
The statements from the provincial government are a blow to Potash's attempts to find an alternative to the hostile $38.6-billion offer on the table from BHP Billiton, because while the province doesn't have an official say, it does have influence in Ottawa. Under the Investment Canada, the federal government, which does have to approve the deal, is supposed to at least take into consideration the wishes of the province. Also, Saskatchewan is a big vote base for the federal Conservative government, which may weigh on Ottawa's decision making.
General Motors road show to begin in November
This time a road show could really be a road show -- General Motors Corp. is expected to hit the trail to market shares to potential investors as soon as the November U.S. elections are done. GM will start the road show Nov. 3, price the stock on Nov. 17 and GM will debut on exchanges Nov. 18, according to Reuters.
3 Who?
It turns out the private equity firm chasing Burger King isn't called 3i, as originally reported, but 3G Capital. 3i exists, but Burger King isn't their kind of deal. The bigger question is what's with all these 3 names? And who got 3D Capital, clearly the coolest name of all?
Wednesday, September 1, 2010 6:18 PM EDT
Canadian named new CFA chair
Tim Kiladze
Margaret Franklin, president and chief executive officer of Kinsale Private Wealth in Toronto, has been appointed the new chair of the CFA Institute’s board of governors. She replaces American Tom Welch.
Starting Wednesday, Ms. Franklin heads the 18-person board comprised of members from an assortment of countries including China, Singapore, Switzerland and the United States. Although the CFA Institute also has a president, the board of directors sets the organization’s strategic goals and gathers throughout the year to ensure the organization is on target to meet them.
Wednesday, September 1, 2010 2:37 PM EDT
Nerves fraying on Kinross-Red Back?
Boyd Erman
The market is getting a bit jittery about the possibility that Kinross Gold Corp. won't succeed in getting investor backing for its takeover of Red Back Mining Corp.
The spread between the Kinross bid and the offer price has widened out Wednesday, after a similar move Monday.
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Streetwise Contributors
Boyd Erman
Boyd Erman is a long-time business journalist who has worked at Dow Jones, Bloomberg, and the National Post before joining the Globe and Mail. Over the years, his areas of coverage have included economics, monetary policy, debt markets and corporate finance.
In addition, he is a regular commentator and guest host on Business News Network.
Tara Perkins
Tara Perkins has been a business reporter since 2004, following a brief stint as overnight editor of globeandmail.com. She has been writing for the Globe's business section since the spring of 2007, covering the banking sector during the course of the financial crisis. Prior to that, she worked for the Toronto Star. Tara has a Bachelor of Journalism from Ryerson University and a Bachelor of Commerce from the University of Guelph.
Grant Robertson
Grant Robertson joined The Globe and Mail as a business reporter in 2005 after five years as a business writer at the Calgary Herald. His areas of coverage have included the oil and gas industry, the transportation sector and media & telecom. He now covers the banking sector for The Report on Business and writes for Report on Business Magazine.
Tim Kiladze
Tim Kiladze is a business reporter with The Globe and Mail. Before graduating from Columbia University’s Graduate School of Journalism, he worked in equity capital markets at National Bank Financial and fixed-income sales and trading at RBC Dominion Securities. Tim has a Bachelor of Commerce in finance from McGill University.
Jeff Gray
Jeff Gray joined The Globe in 1998. After stints as a reporter in sports and as a copy editor in news, he helped relaunch globeandmail.com as a breaking news website in 2000. He moved to The Globe's Toronto city hall bureau in 2004, writing a weekly column about traffic and public transit. He has also worked for the world desk of the BBC's news website in London and for CBC News. He covers legal affairs for The Report on Business.
