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Streetwise

News and analysis on Bay Street and the world of finance
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Entry archive:

Lexpert: Demand for real estate law services rise amid housing boom

The real estate law practice area has undergone a sea change in recent years, as insatiable demand for downtown housing ushers in a new wave of mixed-used developments.

In Canada’s largest cities, most commercial real estate practitioners say demand for their services is sky-high and has been for the past few years. If there is one potential cloud on the horizon, it’s the prospect of rising interest rates.

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Why CIBC’s CEO is right to delay the PrivateBancorp takeover vote

TIM KILADZE

The optics are ugly, and the critics will pounce, but what else was Victor Dodig supposed to do? Postponing the shareholder vote for his $4.9-billion acquisition of PrivateBancorp Inc. stings, but it’s the smartest thing for investors.

Save for scrapping such an event altogether, delaying the vote is the ultimate sign of weakness for any acquisition. Doing so sends an implicit, but strong, message to the market: Investors just aren’t having it and are likely to vote against the deal.

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Stirring ghosts of bonus past won't help bankers this holiday

ANDREW WILLIS

I pity the investment banker who decides to throw a hissy fit over this year’s bonus payment.

Canada’s six bank-owned dealers just turned in stellar results, collectively posting profits of $7.8-billion for fiscal 2016, a 5-per-cent increase over the previous year, on the back of strong takeover activity and a surge in equity financings from utilities and energy companies.

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BMO earnings bolstered by higher M&A advisory fees

CHRISTINA PELLEGRINI

For Bank of Montreal, it pays to advise on deals that don’t always make the front pages.

In the fourth quarter, underwriting and advisory revenue at BMO jumped to $279-million from $146-million during the same period last year and $198-million in the prior period.

The lion’s share of the increase was not from debt or equity underwriting, but from advising on transactions in the U.S. that involve mid-sized companies.

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Lexpert: Key players in GMP’s acquisition of First Energy

Lexpert

Lexpert Roundup on the Business of Law

Lexpert identifies and reports on emerging business issues and practice areas in the business of law. Whether online, in our magazine or in the DealsWire e-newsletter, we chronicle deals and lawsuits of interest, and cover issues of broad concern to the legal profession and those who purchase legal services. We hope you enjoy this sampling of our latest content.

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Why former oil darling Northern Blizzard is struggling

TIM KILADZE

It had all the hallmarks of a hot initial public offering. Oil assets at the height of an energy boom. A dividend for retail investors. Reputable private backers.

What has transpired since Northern Blizzard Resources Inc. went public in a $519-million deal in July, 2014, has been anything but stellar.

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Industrial Alliance buys Scotiabank unit HollisWealth

TIM KILADZE

Bank of Nova Scotia is selling its HollisWealth network of financial advisers to a growing Canadian insurer, parting ways with a business it acquired five years ago.

Industrial Alliance Insurance and Financial Services Inc. is buying HollisWealth, adding $34-billion in assets under administration for an undisclosed price. To help fund the purchase, Industrial Alliance announced a $139-million equity financing.

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Haywood Securities hires new head of energy banking

Jeffrey Jones

Haywood Securities Inc. has hired a new head of energy banking, just as signs point to improvements in the oil industry’s fortunes.

Haywood has named Vic Rodberg managing director and head of energy investment banking in the dealer’s Calgary office, filling a post that has been vacant since early this year.

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National Bank strikes partnership with Bill Gross

CHRISTINA PELLEGRINI

National Bank of Canada is striking a partnership with Bill Gross, once dubbed “the king of bonds.”

The country’s sixth-largest bank started a new global fixed-income fund mid-last month and its portfolio is being managed by Mr. Gross and the team at Denver-based Janus Capital Management LLC.

The NBI Unconstrained Fixed Income Fund will invest mainly in fixed-income securities of issuers with various maturities and credit ratings, according to the fund’s prospectus. It also includes a mix of other asset classes including common and preferred shares, mortgage-backed securities and derivatives. Up to 25 per cent of the fund’s net assets can be invested in high-yield bonds.

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Proxy adviser knocks CIBC’s big takeover bid, CEO unfazed

CHRISTINA PELLEGRINI

Canadian Imperial Bank of Commerce’s chief executive officer is confident investors will bless his $4.9-billion bid for Chicago-based PrivateBancorp next week, despite the objection of one major proxy adviser.

In June, CIBC agreed to acquire PrivateBancorp, a private and commercial bank with about 18-billion (U.S) in assets, for a mix of cash and stock. If approved, the deal will be the biggest in CIBC’s history and will boost the bank’s presence in the U.S., recasting the perception that it is overly exposed to Canada.

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RBC’s capital markets strength masked by equity trading woes

CHRISTINA PELLEGRINI

Royal Bank of Canada recorded its “best year ever” for fees earned from advising on mergers and acquisitions, but a fourth-quarter drop in total profit from its capital markets overshadowed the success.

The unit’s net income fell to $482-million, a drop of 13 per cent from the same period a year ago.

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Lexpert: Investors abroad take aim at Canada’s cultural protectionism

LEXPERT

Even as Canada plays catch-up on the international trade scene through its pursuit of bilateral investment treaties (BITs), it faces its first non-NAFTA investment claim and the first BIT claim against it by a developing-country investor – and from no less a trading power than Egypt.

An Egyptian telecom firm has requested arbitration from the International Centre for Settlement of Investment Disputes. The dispute almost certainly arises from the company’s failed attempt to buy a controlling interest in a Canadian wireless-service provider a few years ago. This is the first BIT dispute in which Canada finds itself on the defensive, and the case is squarely within the realm of the cultural-protectionism allegations that have long sullied Canada’s reputation as a free-trade advocate.

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Scotiabank posts growth in fixed-income trading revenue

CHRISTINA PELLEGRINI

Strong fixed-income trading revenues were a boon to Bank of Nova Scotia during fiscal 2016.

Scotiabank, which reported earnings Tuesday, posted revenue from interest rate and credit trading that surged to $613-million in the 12 months ended Oct. 31. That compared to the $400-million it generated in 2015.

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If investment advisers disappear, how will companies raise money?

TIM KILADZE

As Canadians debate the role investment advisers should play in managing their money, there is one argument that continues to get overlooked: The help they provide to companies who need to finance.

With the wealth management business under siege, as regulators crack down on fees and low-cost funds hurt total revenues, there is a cloudy future for investment advisers. The industry's evolution is raising questions about the effects on individual investors and what type of advice they are able to get.

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Last week’s best reads: HollisWealth, Sprott, Alignvest

Scotiabank looking to sell independent advising firm HollisWealth

Bank of Nova Scotia is in talks to sell HollisWealth, an independent adviser network, as the wealth-management industry faces slowing growth and greater regulatory pressure, sources say.

Quebec City-based Industrial Alliance Insurance and Financial Services Inc. is the front-runner to buy the business, those people said. It isn’t clear how much Industrial Alliance is offering for the asset or if the process will result in a definitive sale.

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Eric Sprott shows why a golden deal may be better than a pile of cash

ANDREW WILLIS

In recent weeks, the bright lights in mining and finance circles have been asking what on earth Eric Sprott is up to.

Mr. Sprott’s stock picking prowess has made him an occasional billionaire – the 72-year-old money manager has a chunk of his fortune tied up in gold companies, which means he is well-to-do all the time and vaults into the ranks of the unimaginably wealthy when bullion prices soar.

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Scotiabank looking to sell independent advising firm HollisWealth

RITA TRICHUR, TIM KILADZE and CHRISTINA PELLEGRINI

Bank of Nova Scotia is in talks to sell HollisWealth, an independent adviser network, as the wealth-management industry faces slowing growth and greater regulatory pressure, sources say.

Quebec City-based Industrial Alliance Insurance and Financial Services Inc. is the front-runner to buy the business, those people said. It isn’t clear how much Industrial Alliance is offering for the asset or if the process will result in a definitive sale.

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Lexpert: Feds agree to security review for foreign businessman

LEXPERT

The federal government has consented to the Federal Court’s setting aside of a Cabinet order, requiring a Chinese investor to divest control of a Canadian business for national security reasons.

The decision will have significant consequences for the future of foreign investment review in Canada. Since the national security process was introduced in 2009, there have been no successful judicial reviews of the eight national security reviews that have occurred.

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Alignvest’s deal could be blueprint for Canadian SPACs

Andrew Willis

They call themselves the SPAC mafia.

They are an unofficial but influential group of investors who make or break any deal proposed by a special-purpose acquisition corporation, or SPAC. And this hard-to-please group has found a deal they like in Alignvest Acquisition Corp.’s bid for a U.S. wireless company, one of three Canadian SPACs currently seeking shareholder approval for a takeover.

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Competition Bureau closes investigation into TMX Group

NIALL McGEE

The Competition Bureau has closed its investigation into TMX Group, concluding that owner of the Toronto Stock Exchange likely did not violate the Competition Act in the operation of its market data business.

Last year, TMX rival Aequitas Innovations Inc. complained to the Bureau about what it maintained was “anti-competitive conduct” from TMX Group in relation to its market data product. At the time, Aequitas was attempting to build out its own competing data product. Aequitas alleged that agreements between TMX and investment dealers prevented the sharing of private data without the consent of TMX Group.

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Yamana’s gold IPO on track, but prices at deep discount

TIM KILADZE

After several attempts to sell or spin off its Brazilian assets, Yamana Gold Corp.’s finally found some luck.

Late last week, the Canadian gold producer filed a final prospectus for its initial public offering of Brio Gold Corp., a new, separate company that will hold the Brazilian properties.

The deal was a tricky sell when it first launched in October, because unlike a traditional IPO, Yamana decided to do this one by way of a rights offering. Under these terms, existing shareholders were given the right to purchase stock in the new company. Normally, spin-outs involve offering the shares to a mix of new and existing shareholders.

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RBC chief strategist Jamie Anderson to retire early next year

ANDREW WILLIS

Royal Bank of Canada head of corporate strategy and development Jamie Anderson will retire from the bank early in the new year, and the veteran deal maker’s replacement signals that RBC plans to continue expanding in the U.S. market.

Mr. Anderson, 63, recently began informing colleagues and clients that he will wrap up a storied career with RBC at the end of January, 2017.

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Ontario Court of Appeal clarifies equitable subordination

LEXPERT

Has Ontario’s highest court closed the door on claims of equitable subordination in bankruptcy proceedings? That was one interpretation of a decision that dealt with the Companies’ Creditors Arrangement Act. The Court of Appeal’s decision regarding U.S. Steel Canada Inc. means that creditors won’t be able to litigate conduct-based allegations among themselves in CCAA proceedings, according to one Toronto lawyer.

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Dundee to sell capital markets unit to employees for $15-million, sources say

NIALL McGEE

Dundee Corp. has decided to remain a key stakeholder in its struggling capital markets business and inject money back into the unit – a move that has taken some observers by surprise.

In January, The Globe and Mail first reported Dundee’s plans to spin out its capital markets division to its employees.

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Intact hires former CIBC deal maker

Jacqueline Nelson

Intact Financial Corp. has hired CIBC World Markets investment banking veteran Don Fox, bolstering its management team at a moment when the company is looking for growth opportunities.

In the new year, Don Fox will take on a new role at the country’s largest property and casualty insurer as executive vice president overseeing investment management, corporate legal and development teams, and audit and finance functions. He officially takes over the new role after a two-month transition period that lasts until March.

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CPPIB revamps public markets unit as CEO moves to refocus fund

TIM KILADZE and JACQUELINE NELSON

Canada Pension Plan Investment Board is restructuring its public markets division, marking major changes to its largest investment group and signalling chief executive Mark Machin’s intention to refocus the country’s biggest pension fund.

On Monday, CPPIB unveiled a revamp of its public markets group, known internally as PMI, or public market investments, according to people familiar with the changes. The division managed $115.4-billion as of March 31, the fund’s fiscal year end, more than the teams responsible for private market investments, investment partnerships and alternative assets such as real estate or infrastructure. The restructuring involves merging different strategies and laying off some staff.

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McMillan launches public affairs firm as clients deal with heightened regulations

CHRISTINA PELLEGRINI

McMillan LLP, a law firm with five offices in Canada and one in Hong Kong, is starting a public affairs firm, seizing on an opportunity as many of its corporate clients across a number of sectors grapple with heightened regulatory risks.

The consultancy, which is named McMillan Vantage Policy Group, will offer services such as policy and regulatory analysis, strategic communications and government relations, with a goal of bridging the gap between the private and public sectors.

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Ottawa enlists Morgan Stanley to review ownership options for 18 Canadian ports

ANDREW WILLIS AND JACQUELINE NELSON

The federal Liberals are paving the way for the potential sale of government-owned shipping hubs, part of a larger strategy to encourage private-sector investment in infrastructure.

Ottawa announced late on Monday that it had hired investment bank Morgan Stanley Canada Ltd. to review ownership options for 18 Canadian ports. Canada Development Investment Corp., a Crown agency responsible for selling federal assets, hired the firm “to provide financial advice” on its port holdings, which include facilities in Halifax, Montreal, Toronto, Thunder Bay, Ont., and Vancouver.

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Macquarie Capital beefs up Calgary research department

JEFFREY JONES

Macquarie Capital Markets Canada Ltd. has added to its Calgary research department following the recent departure of a veteran energy analyst.

Macquarie has hired Brian Kristjansen, who had covered small and mid-sized exploration and production companies for Dundee Capital Markets Inc.

Mr. Kristjansen joins Brian Bagnell, who also covers oil and gas at Macquarie in Calgary.

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Maple Leaf Foods activist Boland finally retreats, leaves board

TIM KILADZE

Greg Boland’s six-year saga to shake up Maple Leaf Foods Inc. has finally come to an end, with the activist investor stepping down from the company’s board of directors.

When he first invested in 2010, Mr. Boland launched a high-profile proxy battle against a company that was in rough shape. Some investors believed the board was stacked with allies of the McCain family, which owned a one-third stake, and the company was struggling to compete with much more efficient global rivals.

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