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Streetwise

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

Attention shoppers: The oil patch is on sale

JEFFREY JONES

Is Encana Corp. oversold or underacquired?

It’s a question investment-banking types are asking as the company’s shares sink under the weight of falling oil prices and last week’s disappointing quarterly financial showing.

Stock in one of Canada’s marquee energy producers is worth about a third of what it was a year ago. To put it another way, it spent $9-billion (U.S.) on U.S. oil acquisitions last year, a figure that is now nearly $3-billion more than the entire company’s market capitalization.

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Daily Deal Roundup: Honeywell hits the acquisition trail

SERES LU

DEAL OF THE DAY: Honeywell shells out $5.1-billion for Elster

Industrial systems-maker Honeywell International Inc. has acquired Elster, a manufacturer of water and gas meters, from Melrose Industries for $5.1-billion (U.S.) cash. The deal comes as part of Honeywell CEO Dave Cote’s plan to spend $10-billion on M&As by 2019 to bolster Honeywell’s equipment offerings and market presence. Melrose bought Elster in 2012 for $2.3-billion. Full story

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Real estate darling Tricon raises $150-million as shares climb

TIM KILADZE

The Toronto-based residential real estate company taking the United States by storm is tapping investors for fresh funds as it builds a brand new dimension of its business model.

Late Tuesday, Tricon Capital Group announced the creation of a new initiative, Tricon Luxury Residences, which will focus on developing and managing top-tier rental apartments in Canada and the United States. Until now, Tricon has largely focused on developing residential homes and managing single-family rentals south of the border – 90 per cent of its assets are housed in states such as Texas, Florida and California.

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There’s new hope for a national securities regulator. Don’t let it die

TIM KILADZE

To all the people putting in countless hours to create a pan-Canadian securities regulator: You’ve made great strides, don’t you dare look back now.

Amid widespread political wrangling and never-ending delays, it has been easy to start worrying the dream is dying. Ontario and British Columbia roared out of the gates two summers ago with plans to create a co-operative regulator, but since then, more and more hurdles have popped up.

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Daily Deal Roundup: Teva to become one of world’s biggest drug firms

SERES LU

DEAL OF THE DAY: Teva snaps up Allergan’s generic business in $40-billion deal

Teva Pharmaceutical Industries has agreed to buy Allergan PLC’s generic drug business for $40.5-billion (U.S.). Allergan will receive $33.75-billion in cash and shares of Teva valued Monday at $6.75-billion. The deal will make Israeli-based Teva one of the world’s largest pharmaceutical firms. Full story

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CI Financial committed to struggling Marret

NIALL McGEE

CI Financial Corp.’s chief executive officer says the firm is “absolutely” committed to sticking with Marret Asset Management Inc., run by long-time bond manager Barry Allan, despite signs that the company is struggling.

“As we go forward, I think it will continue to be better,” Stephen MacPhail, CI Financial’s CEO, said in an interview on the prospects for Marret, whose portfolio managers are responsible for running a good chunk of CI’s fixed-income business.

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Top-ranked telecom analyst leaves Bay Street for Wind Mobile

TIM KILADZE

Burgeoning wireless provider Wind Mobile is beefing up its management ranks by hiring one the industry’s leading telecom analysts.

Glen Campbell is joining the company to take on the role of chief commercial officer, leaving behind his gig as head of Canadian equity research at Bank of America Merrill Lynch. At BofA, Mr. Campbell also oversaw coverage of Canadian telecom companies.

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Daily Deal Roundup: News Corp buys Canadian startup Checkout 51

Duncan Hood

MOVE OF THE DAY: Canadian investment bank Edgecrest puts itself up for sale

Canadian mining-focused investment bank Edgecrest Capital has put itself on the auction block, hurt by a prolonged downturn in the natural resource sector that has hit fees and activity, according to two sources familiar with the situation. The move comes two years after Toronto-based Edgecrest, which is led by investment banker David Beatty, opened shop. Full story

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Couche-Tard investors asked to weigh Freedom 65 clause

Sean Silcoff

For years convenience-store giant Alimentation Couche-Tard Inc. has seemed like the most enlightened of Quebec’s dual-class share public companies, relatively speaking.

Yes, it had two classes of shares that left majority voting power with the four founders – including executive chairman and retired CEO Alain Bouchard – despite the fact they collectively own just 22.7 per cent of the equity. But the 10-to-one voting rights on their Class A shares came with a sunset clause: on the first day when all founders (including retired executives Jacques D’Amours, Richard Fortin and Réal Plourde) were 65 years old or when they collectively held less than half of the voting rights, their stock would lose its superior voting rights. That would have happened no later than 2021 when Mr. D’Amours turned 65.

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AGF Management’s head of retail to leave investment firm

TIM KILADZE

AGF Management Ltd. is parting ways with the head of its retail mutual fund business, marking the first major personnel shakeup at the company since appointing a new chief investment officer.

Gordon Forrester, who oversaw the retail arm that is estimated to contribute 80 per cent of AGF’s revenues, is leaving the firm in less than two weeks, according to an internal memo sent to employees. The company did not name a replacement. Instead, chief executive Blake Goldring is expected to get more involved in the retail business’s day-to-day operations.

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Daily Deal Roundup: Valeant surge continues with Commonwealth Labs buy

DUNCAN HOOD

DEAL OF THE DAY: Brookfield nearing deal for $1.5-billion of Berlin Property

Brookfield Asset Management Inc., Canada’s largest alternative asset manager, is nearing a deal to acquire a group of buildings on Berlin’s Potsdamer Platz for about €1.4-billion ($1.5-billion U.S.), people with knowledge of the matter said. Full story

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Stronach’s Acasta boosts IPO to $350-million

NIALL McGEE

Star-studded SPAC (special purpose acquisition company) Acasta Enterprises Inc. is boosting its initial public offering to $350-million from its initial target of $275-million. The shell company which features a bevy of household Canadian business names among its list of managers and advisors is expected to close its offering on July 30. Acasta is set to be the biggest IPO in the nascent SPAC sector this year.

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PSP Investments eyes global growth, reshapes strategy on strong results

JACQUELINE NELSON

The pension plan for federal government employees is ramping up its international expansion plan, reshaping its investment strategy as assets are projected to double within a decade.

The Public Sector Pension Investment Board (PSP Investments), which invests pension funds for federal civil servants including the Canadian Forces and the RCMP, said Thursday it was entering a new stage of development after earning a total portfolio return of 14.5 per cent in its fiscal 2015 year ended March 31. These results beat its investment benchmarks and pushed assets under management up by 20 per cent to $112-billion.

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Pan-Canadian securities regulator ready to forge ahead

TIM KILADZE

The drawn-out dream of creating a common Canadian securities regulator is one step closer to reality, with Ottawa and the group of provinces backing it set to announce a chair for the board of directors this week.

The creation of a common regulator, formally known as the Co-operative Markets Regulator, has been pushed back multiple times, but there is a belief that with more provinces, such as Nova Scotia, on the cusp of signing, the group has enough critical mass to forge ahead, according to people familiar with the negotiations.

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Lexpert: How businesses should cope with infringers in 3D printing

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 sample of our latest content.

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Daily Deal Roundup: Royal LePage expands to rule the West Coast

AHMAD HATHOUT

DEAL OF THE DAY: BlackBerry buys crisis alert system AtHoc

BlackBerry Ltd. is looking to make more money off of its popular BBM messaging service by acquiring privately-held AtHoc, a provider of secure, networked crisis communications. The proposed acquisition comes in the same week the Waterloo-based company made further cuts to its work force. The terms were not disclosed. Full story

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Lexpert: Feeling underappreciated at work?

Lexpert

Corporate law firms have never been a great fit for the rebellious. With a few exceptions, the culture demands that associates never challenge the firm or senior partners. So what to do if you’re a senior associate and feeling underappreciated? Can you have “the talk” without blowing up your (less than stellar) prospects?

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DLA Piper snags four lawyers from Wildeboer Dellelce

JEFF GRAY

The lure of working for one of the world’s largest law firms has netted DLA Piper’s new Canadian outpost four new partners, all from Bay Street’s small and scrappy Wildeboer Dellelce LLP.

DLA Piper, which after years of rumours finally moved into Canada earlier this year by gobbling up Vancouver-based mid-tier firm Davis LLP, said from the get-go that it’s short-term goal was to beef up the small Toronto office it inherited.

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Successful REIT IPO gives sector much-needed confidence boost

TIM KILADZE

The trading debut of Automotive Properties REIT on Wednesday was precisely what Canada’s real estate sector needed most: A successful IPO.

Despite ideal conditions for real estate investment trusts – low bond yields, market volatility – the REIT sector has struggled to drum up new investor interest. Canadians aren’t fleeing the sector by any means, but they aren’t showing much willingness to plow money into new issues, either.

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Fewer oil-patch deals than expected despite low price environment

Jeff Lewis

The much-anticipated gusher of oil-patch deals is still a trickle.

An otherwise brisk deal flow through the second quarter – 137 transactions worth $115-billion (U.S.), according to U.S. government data – was skewed by April’s blockbuster acquisition of Britain’s BG Group PLC by super-major Royal Dutch Shell PLC.

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Daily Deal Roundup: AT&T-DirecTV merger reportedly approved with conditions

AHMAD HATHOUT

DEAL OF THE DAY: Antares Capital lining up financing in deal to CPPIB

Antares Capital is lining up a $13.9-billion (U.S.) financing package that backs General Electric Capital Corp’s sale of the middle market sponsor finance platform to Canada Pension Plan Investment Board (CPPIB) and raises funds for future growth, sources said. The package for the acquisition, which was announced on June 9, consists of a $1.2-billion term loan A and a $2-billion revolver, as well as a $10.7-billion asset-based facility, the sources said. Full story

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Beware the hype of the next capital markets deal

TIM KILADZE

The sad story of Walter Energy Inc.’s downfall is an ugly reminder that human beings have selective memories.

In December, 2010, at the start of the much-hyped mining supercycle, executives at the Alabama-based company felt extremely lucky. After months of negotiations, they finally found a way to buy Canada’s Western Coal Corp., a company they coveted. All it took was $3.3-billion.

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Daily Deal Roundup: Birch Hill raises $1-billion, and doesn’t stop there

DUNCAN HOOD

Fairfax’s new India Fund picks up another firm, B.C.’s Avcorp buys a struggling German aerostructures division and China Molybdenum makes a play for Barrick’s Zaldivar copper mine. Meanwhile Birch Hill just keeps raising more and more PE capital – it’s already at $1 billion, and it ain’t done yet.

DEAL OF THE DAY: Fairfax India to buy stake in logistics firm NCMSL for $126-million

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Aston Hill loses both CEO and CFO

NIALL McGEE

Aston Hill Financial Inc. has been hit by a new wave of executive departures that will see both its CEO and CFO leave.

Eric Tremblay, who co-founded the asset management firm in 2007, is stepping down as chief executive officer effective Aug. 31 to “pursue personal endeavours” the firm said in a release. He is also resigning as chairman of the board but will remain with the firm as a director.

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BMO says deal with Piper Jaffray not a retreat from U.S. capital markets

DAVID BERMAN

Bank of Montreal is selling its municipal bond sales, trading and origination business to Piper Jaffray Cos. Inc., but the Canadian lender is making it clear the sale does not signal a retreat from its U.S. capital markets business.

“We have a better opportunity to use the resources, that have supported the business to date, in other strategies that we are pursuing for growth in the U.S.,” Luke Seabrook, head of global trading products at BMO Capital Markets, said in an interview.

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Deventa Energy scales back plans as capital proves scarce

JEFFREY JONES

Deventa Energy Inc.’s effort to raise $100-million to plow into its Montney natural gas properties didn’t pan out as energy markets sputtered.

The private Calgary company had engaged FirstEnergy Capital Corp. last spring to help attract investors to plans for an accelerated development of liquids-rich land-holdings in Alberta, where wells cost about $10-million a pop.

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Fairfax delays meeting to award share control to Watsa

JACQUELINE NELSON

Fairfax Financial Holdings Ltd. is delaying a special meeting to decide the future of chief executive Prem Watsa.

The Toronto-based insurance and investment company said Monday it will postpone by three weeks its decision on whether Mr. Watsa should be able to lock in his current 41.8 per cent voting control, even as the company issues more equity over time.

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Moody’s sounds cautious note on Scotiabank’s Citigroup deal

DAVID BERMAN

Moody’s Investors Service is arguing that Bank of Nova Scotia’s recent agreement to buy Citigroup’s retail and commercial banking businesses in Panama and Costa Rica is a credit-negative move for the Canadian lender. The reason: The deal expands Scotiabank’s Latin American footprint, which implies that domestic operations are safer at a time when the Canadian economy is looking troubled.

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Fairfax India Holdings revs its acquisitions engine with two bids

JACQUELINE NELSON

After circling investment opportunities in India for months, Fairfax India Holdings Corp. is starting to pick up assets, launching its first two bids in the last week.

The investment fund founded by Prem Watsa said Monday it would acquire a majority stake in commodity storage company National Collateral Management Services Ltd. The $126-million deal comes as National Collateral is looking to expand its business amid growth in India’s agriculture industry, from grains to raw silk and guar gum.

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Two companies fighting over use of confidential information settle out of court

AHMAD HATHOUT

Two companies embroiled earlier this week in a legal spat over the use of confidential information in a takeover bid have settled out of court.

Late last week, alternative lender IOU Financial filed a lawsuit in the Quebec Superior Court against Qwave Capital LLC to stop the Atlanta-based venture capital firm from using confidential information in its hostile partial takeover bid for 55 per cent of the Montreal-based company, launched in late June.

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