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Streetwise

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

Alberta to automatically approve out-of-province securities rulings

JEFF GRAY

In Canada’s balkanized financial markets enforcement regime, when one provincial watchdog bans or suspends a fraudster or someone else who has violated securities rules, the others usually need to hold their own “rubber stamp” hearings to make the order apply in other provinces.

But the Alberta Securities Commission announced Thursday that as of July 1, most orders and settlement agreements made by other securities commissions across Canada will “automatically take effect” in Alberta, without any hearing or any notice to the person or company affected. Decisions made by regulators outside Canada, such as the U.S. Securities Exchange Commission, will not be automatically reciprocated, but could still be rubber-stamped and enforced by the ASC as they are now.

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Macquarie hires in equity capital markets

TIM KILADZE

Macquarie Capital Markets Canada has added an investment banker to its equity capital markets (ECM) team.

Daniel Goldberg joins the dealer as a vice-president in ECM, the group that prices and executes equity financings. Before this, Mr. Goldberg worked at CIBC World Markets, where he was a director in the office of the vice chairman under Jim Prentice, and also worked in investment banking in both Winnipeg and Toronto.

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Daily Deal Roundup: Brookfield’s $6.8-billion great train robbery?

DUNCAN HOOD

Given that the markets were closed for Canada Day yesterday, you won’t be surprised that there aren’t many deals to report today. But what the deals lack in number, they make up for in size, with Brookfield’s $6.8-billion offer for Australia rail freight firm Asciano making headlines on both sides of the globe. A big deal, but not big enough for some of Asciano’s shareholders, who worry it undervalues the company. To some, it could even be considered robbery.

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Canadian market for deals surges in first half of year

JACQUELINE NELSON

Canadian deal flow surged in the first half of the year, with large financings and acquisitions contributing to a hike in business for investment banks.

Canadian new equity issuances flew high in the first six months, as investment banks raised more than $30-billion for companies, according to data from Thomson Reuters.

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Lexpert: Lawyers warn proposed Digital Privacy Act may be too onerous

Lexpert

Canada’s proposed Digital Privacy Act, aimed at helping Canadians protect their personal information online, exposes everyone from a tiny convenience store to a multinational corporation to onerous requirements they may not be able to meet, some privacy lawyers are warning.

One provision of Bill S-4 that’s sounding alarms, for example, is the mandatory reporting of all data security breaches to the Privacy Commissioner, says David Fraser at McInnes Cooper.

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Results trump intent in proving housing discrimination: U.S. Supreme Court

ADRIAN MYERS

For those of you that aren’t avid followers of the legal “argle-bargle” and “jiggery-pokery” of the U.S. Supreme Court, you could be forgiven for thinking that Obergefell v. Hodges, which dealt with same-sex marriages, was the only major civil-rights decision the court handed down last week. And rightfully so: Obergefell is both a social and legal landmark.

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Daily Deal Roundup: Is a Hertz acquisition next for Element Financial?

Duncan Hood

It was big day for Canada on the deals front: Apart from the massive $3.3-billion Cenovus land sell-off to Teachers and the Prime Advisors acquisition by Sun Life, the last 24-hours have seen a pile of interesting medium and smaller deals too. Ballard Power Systems is paying $30-million for Protonex, Ricoh Canada is snapping up Graycon Group, and Magna is reportedly eyeing a German auto transmission systems manufacturer. Oh, and Element Financial still isn’t satisfied after its $8.6-billion GE Capital fleet business acquisition – it says a similar unit owned by Hertz may be next. Happy Canada Day!

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Legacy Oil’s downfall shows debt’s dark side

JEFFREY JONES

For the oil patch, the legacy of Legacy may be a much greater wariness of debt. At least for a while.

Legacy Oil + Gas’s debt-heaviness against a backdrop of collapsing crude prices led the energy producer into the arms of Crescent Point Energy in a deal that garnered investor approval on Tuesday.

It’s certainly not what CEO Trent Yanko envisioned when he started the business in 2009, and he says it’s a cautionary tale to other oil-industry builders. There are more than a few in downtown Calgary facing similar pressures and, if the commodity trough extends into the autumn, look for them to get picked off at bargain prices too, after exhausting other options.

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With Prime Advisors acquisition, Sun Life broadens asset management business

JACQUELINE NELSON

Sun Life Financial Inc. has snapped up another U.S. money manager that specializes in long-term investors, rounding out its institutional investment platform in North America.

On Tuesday, Sun Life Investment Management said it would buy Redmond, Wash.-based Prime Advisors Inc., absorbing $13-billion (U.S.) in assets under management. The terms of the deal weren’t disclosed.

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Amid Greek debt crisis, a round of applause for Canada's banking system

TIM KILADZE

If there’s any silver lining for Canadians in the financial calamity unfolding in Greece, it’s that this crisis should remind us of how fortunate we are.

Since the global financial meltdown started in 2007, Canadian banks have shone. The country’s largest lenders continue to rack up record profits – the Big Six banks made $33-billion combined in 2014 – and in the first few years of the economic recovery, they were praised as a paragon of prudent banking.

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Daily Deal Roundup: Element snags GE Capital’s fleet operations

AHMAD HATHOUT AND SERES LU

While the world worries about Greece, the Daily Deal Roundup is worried about keeping you informed about the deals of today. The banks are indeed open and willing to underwrite some blockbusters, including our deal of the day – Element’s announced acquisition of GE Capital’s fleet operations in the U.S., Mexico, Australia and New Zealand.

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Volatility in Asia hasn’t slowed Manulife’s zeal for real estate IPO

JACQUELINE NELSON

It’s been a rough ride for many shareholders in Asia of late, but that’s not slowing Manulife Financial Corp.’s approach to Singapore’s financial markets.

The insurer said Monday that it has launched an initial public offering for a U.S. office real estate investment trust (REIT). The company will sell 694.4 million units at a price of 82 cents (Singapore) a unit (76 cents). That’s about $569.4-million (Singapore) or $524.7-million.

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Element Financial already looking to future growth plans after GE deal

JACQUELINE NELSON

Element Financial Corp.’s $8.6-billion acquisition of part of General Electric Co.’s fleet management business is not the end of the company’s growth plans, according to chief executive Steve Hudson, who went so far as to name his next acquisition targets.

“This message of growth at Element is: It’s not over, it’s not over, it’s not over,” said Mr. Hudson, on a conference call with analysts Monday. “They say you have to say something three times,” he added.

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Canaccord Genuity capital markets head made $11.7-million last year

NIALL McGEE

Daniel Daviau, Canaccord Genuity Group Inc.’s top investment banker, made $11.7-million in fiscal 2015, according to the firm’s proxy circular, earning more than most major bank chief executive officers and scores of other household names in business.

The 50-year-old CEO of North American capital markets was paid a salary of $494,000, owns $2.6-million worth of restricted share units (RSUs) in Canaccord and was paid an $8.6-million bonus.

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Daily Deal Roundup: Watsa goes shopping in India, and TMAC boosts its IPO

Duncan Hood

The end of an eventful week sees Fairfax make a $120-million move in India, TMAC boost its IPO, and lots of people question the sense of Potash’s big play for Germany’s K+S Industries. Have a great weekend.

DEAL OF THE DAY: Fairfax’s Watsa to buy Indian logistics firm: sources

Fairfax India Holdings, a fund set up by Canadian investor Prem Watsa to target Indian assets, is set to take a majority stake in logistics firm National Collateral Management Services (NCMSL), two sources familiar with the matter said. One of the sources said the deal, for a 70 to 75 per cent stake in the commodities storage and services firm, could be worth $120-million to $150-million. Full story

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Potash Corp.’s proposed K+S takeover would be no cake walk

TIM KILADZE

Some merger ideas make sense to everyone. When Loblaw Companies Ltd. announced its blockbuster acquisition of Shoppers Drug Mart two summers ago, the strategic rationale was crystal clear, and support for it was through the roof.

But with Potash Corp. of Saskatchewan’s proposed takeover of Germany’s K+S Industries, which is expected to be worth $9.7-billion, there are already serious questions about it – and it’s only day two.

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Peters & Co shakes up ranks

JEFF LEWIS

Peters & Co. Ltd. shuffled its leadership ranks and said its managing director of institutional sales is retiring.

Steve Larke is leaving for personal reasons after 10 years with the Calgary-based brokerage, Peters told clients in a note. His resignation is effective Dec. 31.

The firm promoted Bryce Williams to head institutional sales. Rob Scott is now head of trading, from principal. Mitch Molloy is transitioning to managing director, capital markets.

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Lexpert: Canada’s privacy laws impose heavy burden

LEXPERT

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 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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Scotia Capital revamps structured products group

TIM KILADZE

Bank of Nova Scotia is reworking its structured products and managed companies businesses, which are housed under its investment banking arm.

The changes at Scotia Capital include the departure of Rajiv Bahl, who previously ran the structured products group, as well as Farooq Moosa, who oversaw Scotia Managed Companies.

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Sprott and Central Fund spat heads toward courts

AHMAD HATHOUT

The scrappy affair over Sprott Asset Management’s move to acquire two of Central Fund of Canada’s precious metals mutual funds has now entered the court system.

Central Fund, the corporate entity behind Central GoldTrust and Silver Bullion Trust, said in a press release on Thursday morning that a Sprott subsidiary filed a claim of oppression against the company in an Alberta court.

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Daily Deal Roundup: Melman and Stronach launch all-star $275-million IPO

DUNCAN HOOD

Big day for deals today: Potash makes a $10-billion play for Germany’s K+S fertilizer, RBC is close to spinning off a Swiss bank and what’s this? A new SPAC (special purpose acquisition corporation) headed by Anthony Melman, chaired by Belinda Stronach, and backed by Calin Rovinescu, Hunter Harrison, Rick Waugh and Geoff Beattie is launching an IPO to raise $275-million. I’d say it’s a done deal.

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BluEarth Renewables gets ownership and management revamp

RICHARD BLACKWELL AND JACQUELINE NELSON

The ownership structure at one of Canada’s fastest-growing renewable energy companies has been shaken up and top management shuffled.

Calgary-based BluEarth Renewables Inc., which owns a portfolio of wind, solar and hydroelectric projects across the county, was jointly owned by the Ontario Teachers’ Pension Plan and an arm of ARC Financial Corp., along with a stake held by management. Now, Teachers has bought out ARC, leaving control of the company in the hands of one of the country’s biggest pension managers.

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Reports of RBC talks to sell Swiss unit not a surprise

DAVID BERMAN

Rumours that Royal Bank of Canada is in advanced talks to sell its Swiss private banking arm is hardly a surprise, given that shifting financial regulations in Switzerland have made private banking a challenging industry for foreign banks operating there.

Bloomberg News reported that RBC is in advanced talks to sell its unit to Banque Syz SA, a division within the Syz Group, a privately owned asset manager with 28.6 billion Swiss francs ($37.7-billion) in administered assets globally.

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Mogo Finance under pressure in trading debut

NIALL McGEE

Mogo Finance Technology Inc. faced pressure in its public debut in Canada, dropping more than 5 per cent on the first day of trading on the Toronto Stock Exchange.

The Vancouver-based online lender is a rare disappointment in a heady Canadian initial public offering market in 2015. Other recent IPOs such as Cara Operations Ltd., Shopify Inc. and Stingray Digital Group Inc. had sizable first day pops.

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Boutique investment dealers defying risk-averse Canadian culture

TIM KILADZE

Impressed by strong results from a growing number of U.S. boutique investment dealers, Canadians are finally showing the courage to launch equivalent firms on this side of the border.

In the U.S., small advisory shops such as Centerview Partners and Moelis & Company keep winning major mandates, stealing deal flow that traditionally would have gone to bulge bracket investment banks. Historically, Canadians were thought to be too timid to launch their own because the big bank-owned dealers have so much clout here – the country is only so big and these large institutions have their hands in so many deals.

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Daily Deal Roundup: A massive new grocer is born

DUNCAN HOOD

Interesting fact: Ahold NV received the designation “Royal” from Dutch Queen Beatrix in 1987. Another interesting fact: After yesterday’s $12.9-billion merger with Belgium’s Delhaize Group, Royal Ahold is now one of the world’s largest supermarket giants, and once its U.S. operations are merged, the Dutch company will own one of the largest grocery chains in the states.

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Daily Deal Roundup: Onex sells a mall and CPPIB buys an IT park

DUNCAN HOOD

It’s property day at the Daily Deal Roundup: A new Canada Pension Plan Investment Board joint venture in India has made its first move, snapping up a $220-million (U.S.) IT park, while Onex has quietly unloaded a $400-million (U.S.) shopping mall in New York. And just for a change of pace, a Canadian startup that produces recipes for cannabis-laden treats has just been bought up by U.S. medical marijuana industry supply company Green Technology. Anyone got the munchies?

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Former Maple Leaf Foods executive Michael Vels named Hydro One CFO

NIALL McGEE

Former Maple Leaf Foods Inc. executive Michael Vels has been appointed CFO of Hydro One Inc.

Mr. Vels spent more than two decades at Maple Leaf Foods, including a 10-year stint as its CFO. In 2014 he was replaced by Debbie Simpson following a restructuring at the company, after the sale of Canada Bread to Grupo Bimbo of Mexico.

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Scotiabank's struggle: Bold strategy, executive upheaval leave morale shaky

TIM KILADZE

After 20 long months, the shell shock stemming from Brian Porter’s radical house cleaning is starting to subside. The billion-dollar question now is whether the pain was worth it.

Since he took over as Bank of Nova Scotia’s chief executive officer in November, 2013, Mr. Porter has put the lender’s executive ranks through intense upheaval. In that time, the financial institution has changed its chief risk officer, chief operating officer, capital markets co-head, wealth management head, marketing head, Latin American head and Mexican head.

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Daily Deal Roundup: Telegraph declares Canadian pension funds the new ‘masters of the universe’

Duncan Hood

Do you know what it feels like to be rejected? Anthem and Energy Transfer Equity do. Both made $47-billion (U.S.) bids for different American companies, and both were promptly spurned. Meanwhile after news of Borealis Infrastructure’s $9.7-billion bid for Severn Trent, The Telegraph wrote that our giant pension funds are “the new masters of the universe” (see story at bottom) with a “unique investing approach” that could see Canada challenging Wall Street. Who, us?

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