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Streetwise

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

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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Manulife staffs up, eyeing growth in private markets

JACQUELINE NELSON

The push to attract new institutional investors is ramping up at Manulife Financial Corp., as the insurer brings on new leaders to fuel the five-year expansion plan for its private markets business.

Manulife said Monday that it appointed three senior managers to newly created roles, a response to some early success the asset management group has seen since being formed in late 2013.

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Tiff Macklem joins Scotiabank board

DAVID BERMAN

Tiff Macklem, the former senior deputy governor of the Bank of Canada, has been appointed to Bank of Nova Scotia’s board of directors, in a move that bolsters the bank’s insight into monetary policy and global finance.

At the central bank, Mr. Macklem helped steer financial policy during the global financial crisis until his departure in 2014 – soon after he was passed over to succeed governor Mark Carney.

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RBC pushes European expansion as other banks scale back

TIM KILADZE

Bolstered by its successful capital markets expansion in the United States, Canada’s biggest investment bank is hiring aggressively across the Atlantic, aiming to position itself as a leading global dealer.

A decade ago, RBC Dominion Securities was largely a Toronto-centric firm. But in the aftermath of the financial crisis the investment bank doubled down in the U.S., particularly in New York, hiring scores of bankers and research analysts.

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Rogers, Telus set to bid for Mobilicity with federal approval

CHRISTINE DOBBY

Telus Corp. and Rogers Communications Inc. are in a race to acquire Mobilicity and the federal government appears poised to approve a deal with one of the suitors.

At least one of the proposed transactions includes the transfer of cellular airwaves to new entrant wireless carrier Wind Mobile Corp.

The blessing of a sale to one of Canada’s largest wireless carriers would appear to be a dramatic change in policy for the government which has worked hard to spur competition in the wireless industry and support alternatives to the dominant carriers. However, the involvement of Wind is believed to be a key factor in Ottawa’s reasoning.

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Zargon Oil under pressure to sell assets, cut costs

JEFF LEWIS

Zargon Oil & Gas Ltd. is facing pressure from a U.S. hedge fund to sell assets and cut costs, the latest sign that shareholder activism is heating up amid the collapse in oil prices.

Livermore Partners, based in Northbrook, Ill., said it wants to be “deeply involved” in decision-making at the Calgary-based oil producer as the company plots ways to cope with the energy-price downturn.

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Daily Deal Roundup: How Facebook almost lost 80% of its value

Duncan Hood

Not much happened deal-wise over the past 24 hours–it must be the weekend. After catching up on the Enbridge deal, you might want to just skip down to the bottom where you’ll find a link to an interesting podcast featuring Marc Andreessen on how Facebook was mis-valued for billions less than it was worth before it went public. Crazy stuff.

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Cracks appearing in IPO market

NIALL McGEE

“On fire.” “Going gangbusters.” “Hot, hot, hot!” Just some of the superlatives that have been thrown around to describe the Canadian IPO market over the past few months.

And why not? From Cara Operations Ltd. to Shopify Inc. to Stingray Digital Group Inc., it has been one slam dunk initial public offering after another. The drill has generally been the following: File a preliminary prospectus, see demand for your shares vastly outstrip demand, increase the size of the deal, price higher than you expected, then sit back and watch the stock rocket on day one.

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Daily Deal Roundup: Martha Stewart sells out and OMERS buys a trucking network

DUNCAN HOOD

There’s been a lot of speculation in the news over the past 24 hours: Will Cenovus and the Ontario Teachers’ Pension Plan sign a massive land deal? Will Teck Resources buy a gold mine from Barrick? Will Martha Stewart finally sell Omnimedia? Will Hootsuite launch an IPO? Read on to find out ...

DEAL OF THE DAY: Cenovus in ‘advanced’ talks with Teachers over land asset sale

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Magris, Teck, Warburg mull offer for Barrick’s copper mine

RACHELLE YOUNGLAI

Private equity executive Aaron Regent has approval from his two main Asian investors to make an offer for Barrick Gold Corp.’s Chilean copper mine, according to people familiar with the matter.

Mr. Regent’s private equity firm is one of a handful of entities that have made it into the second round of bidding for Barrick’s Zaldivar mine. The mine, which has been referred to as the Andean ATM because it generates so much cash, has become one of the hottest assets for sale in this depressed commodities market.

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