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Streetwise

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

Second proxy advisory firm urges change at Aberdeen

JACQUIE McNISH

Proxy advisory firm Glass Lewis & Co. is recommending shareholders of Aberdeen International Inc. replace executive chairman Stan Bharti with dissident shareholder Ryan Morris at a shareholder vote next week.

Citing the need for “additional outside scrutiny and independent oversight” at the money-losing junior mining holding company, the Glass Lewis report recommended Mr. Bharti step down as a director because of “a significant number of potential conflicts.” Mr. Bharti’s family owns Forbes & Manhattan, a private Toronto mining finance company that earns fees and other benefits from Aberdeen. Forbes & Manhattan has stakes in a variety of junior resource companies with which Aberdeen has lent money, exchanged assets and, in some cases, share directors.

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Eric Sprott joins Kirkland Lake Gold as chairman

SEAN SILCOFF

Eric Sprott has added another chairman title to his resume. Fresh from his long-planned decision to step down as lead portfolio manager of his Sprott Asset Management LP and Sprott Inc., the 70-year-old Mr. Sprott is joining the board of Ontario gold miner Kirkland Lake Gold Inc. and replacing Harry Dobson as chairman. The move is subject to regulatory approval.

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Former Barrick deal maker joins TD

JEFF GRAY

The Toronto-Dominion Bank has brought in former Barrick Gold Corp. executive Rick McCreary as deputy chairman of its investment banking arm, TD Securities Inc., as it seeks to strengthen its efforts to work on mining deals around the world.

Mr. McCreary will work closely with Michael Faralla, the managing director and head of global mining at TD Securities. Mr. McCreary was forced out of Barrick in August, when new Barrick chairman John Thornton dismantled the corporate development team. Mr. Thornton was leading a reorganization that saw several senior Barrick executives leave, including the company’s CEO.

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Tsubouchi’s role at Haywood changes again

JEFFREY JONES

Haywood Securities Inc. has shaken up its oil and gas research department, with its prominent former head switching over to a contractor role that allows him to take on other jobs in the industry.

Haywood has appointed Darrell Bishop head of energy research, replacing Dan Tsubouchi. The two had joined the Vancouver-based boutique dealer in 2013 as it sought to rejuvenate its energy business. In that time, the sector has gone from feast to famine as crude prices have fallen by half.

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The burning question on Bay Street: Did RBC overpay?

TIM KILADZE

Even if you buy the long-term acquisition strategy, and even if you believe in the acquired management team, you’d be crazy not to wonder if Royal Bank of Canada paid too much for City National Corp.

Bay Street quickly expressed shock and awe at the $5.4-billion (U.S.) price tag. In public, people were polite, suggesting that RBC paid a “full price” or that the price tag looked a “bit rich.” In private, though, everyone asked the same thing: is RBC serious?

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Huawei appears set to open office in Kitchener-Waterloo

IAIN MARLOW

China’s Huawei Technologies Co. Ltd., one of the world’s largest telecommunications equipment companies, is opening up an office in BlackBerry Ltd.’s hometown of Kitchener-Waterloo – and hiring former employees of the struggling Canadian tech firm to help it beef up on mobile security.

Huawei, which is based in Shenzhen and sells everything from mobile phones and tablets to routers and cellular antennas, is looking to hire engineers in Kitchener, Ont., the heart of Ontario’s technology-hub.

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Wekerle’s Difference Capital loses another executive

NIALL McGEE

Difference Capital Financial Inc. has lost another key executive.

Managing partner Jamie Brown resigned late last week. Mr. Brown was among a handful of executives that CEO Michael Werkerle had identified as being core to the business as recently as July 2014. When he was hired in April 2013 the company trumpeted his experience in investment banking. Mr. Brown previously served as president of Canaccord Genuity Inc.’s U.S. division.

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Secret shopping and private dinners: The story behind RBC’s $5.4-billion (U.S.) deal

TIM KILADZE

Before asking for a dinner date with City National Corp.’s chief executive, Dave McKay assumed the role of secret shopper.

In 2012, Mr. McKay, then Royal Bank of Canada’s personal and commercial banking head, was tasked with shaping RBC’s U.S. growth strategy. After some brainstorming, he set his sights on Los Angeles-based City National, which specializes in serving high net-worth clients.

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Ember Resources’ shallow play is paying off

JEFFREY JONES

Ember Resources Inc. has quietly climbed into the top 15 ranking of Canadian natural gas producers, concentrating on a part of the business many thought the shale revolution had killed off.

The private company, which is backed by Brookfield Asset Management Inc., has become a consolidator of Alberta properties producing coal-bed methane: natural gas trapped in coal seams. It is prospering, even with gas prices well below last year’s levels, chief executive Doug Dafoe says.

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Talisman executives to receive $28-million in Repsol deal

CARRIE TAIT

Talisman Energy Inc.’s top five executives will collectively receive at least $28-million after Spain’s Repsol SA takes over the long-struggling Canadian oil and gas outfit.

This number may rise if some of the senior executives resign within 12 months of the takeover, or are fired at any time.

Talisman chief executive Hal Kvisle is guaranteed the richest package: a $15.1-million goodbye, according to figures in the company’s information circular tied to the takeover agreement. Paul Smith, the company’s chief financial officer, will walk away with $3.5-million; Paul Blakeley, the man in charge of Talisman’s Asia-Pacific business, will collect $3.2-million; Paul Warwick, who oversees action in the Europe-Atlantic, gets $3.2-million; and Robert Rooney, executive vice-president, corporate; will pocket $3-million.

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Lexpert: More deals coming in the oil patch, not fewer

LEXPERT

Lexpert identifies and reports on emerging business issues and practice areas in the business of law. Whether online, in our magazine or 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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RBC’s red-carpet move: L.A.’s City National is ‘Bank of the Stars’

JACQUELINE NELSON

With its $5.4-billion acquisition of Los Angeles-based City National Corp., Royal Bank of Canada has tied itself to the “Bank of the Stars.”

City National earned this moniker and reputation over its 61 years building relationships in the entertainment industry, having formed its first small office on South Beverly Drive in Beverly Hills. One of the company’s founders was a friend of Frank Sinatra’s  – even putting up the ransom money to help recover his son in the 1960s – and City National has provided financing for films such as Silence of the Lambs and Driving Miss Daisy.

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Fund manager alleges Dragons’ Den star owes $1.3-million, seeks bankruptcy declaration

NIALL McGEE

Former star stock trader Michael Wekerle is embroiled in a lawsuit with a long-time business associate who wants to push the CBC Dragon into bankruptcy.

Rohit Sehgal, a portfolio manager with Dynamic Funds, alleges in court filings that Mr. Wekerle owes him $1.38-million (U.S.) from the 2014 sale of a property in New York. He alleges that he has pursued payment from Mr. Wekerle for months and now wants him “adjudged bankrupt and that a bankruptcy order be made in respect of [Mr. Wekerle’s] property.”

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The Bay Street veteran going head to head with Wekerle

JACQUELINE NELSON

From allies to adversaries – the $1.4-million dispute between Michael Wekerle and veteran portfolio manager Rohit Sehgal has decades of history behind it.

As Mr. Sehgal has edged away from the limelight in recent years, Mr. Wekerle’s public profile has been boosted by television appearances and a deal to purchase the storied Toronto concert venue, the El Mocambo. Despite these divergent paths, the two once had a close business relationship and friendship.

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Ontario court won’t hear Aberdeen case until after vote

JACQUIE McNISH

An Ontario judge has delayed a court hearing into allegations of improper stock sales and lavish payments at Aberdeen International Inc. until after a shareholder vote on dissident directors is held.

Aberdeen shareholders are set to vote Feb. 3 on whether to replace the board’s seven directors with a slate backed by two dissident shareholders, San Francisco activist Ryan Morris and U.K.-based fund Nightscape Capital. The investors own a 9 per cent stake in the junior mining holding company.

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Sun Life executive: Bank of Canada thinks oil could stay low

CARRIE TAIT

It’s all about the oil.

At the root of the Bank of Canada’s stunning rate cut Wednesday is oil’s plunge and the resulting hit to the economy, says Sadiq Adatia, chief investment officer for Sun Life Global Investments, a division of Sun Life Financial Inc.

“For the energy sector as a whole, the realization is the Bank of Canada thinks oil is going to be low for a significant period of time,” says Mr. Adatia. “If they [the Bank of Canada] didn’t think that was the case, then you wouldn’t see a rate cut so quickly.”

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TD won’t follow Bank of Canada rate cut

TIM KILADZE

The last thing Canada’s biggest lenders wanted was a sudden rate shock. What they got was a double whammy: a surprise move, coupled with a shift in the wrong direction.

Caught off guard, banks are now scrambling to protect their lending margins. On Wednesday Toronto-Dominion Bank said it is considering keeping its prime interest rate at 3 per cent, meaning it would not lower its customers’ cost of borrowing in line with the Bank of Canada. TD said the central bank's actions are just one of the factors it considers when setting rates.

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Sprott shakes up leadership as founder steps back

JACQUELINE NELSON

There’s been a changing of the guard at Sprott Inc. as its founder steps back from portfolio management.

The firm said Tuesday that Eric Sprott would relinquish responsibilities for the daily management of five funds, a succession planning move the asset manager signalled in late 2013.

The change marks a shift in strategy at Sprott towards team-based fund management and tighter risk controls, the company’s management said in last year’s announcement.

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Horizons CEO makes sudden departure

JACQUELINE NELSON

One of the Canada’s exchange-traded fund leaders is abruptly leaving the firm he founded after a conflict with owners over the company’s future strategy.

Horizons ETFs Management (Canada) Inc.’s chief executive officer Adam Felesky has departed the firm, and he is not leaving for another company, according to Steve Hawkins, Horizons’ chief investment officer.

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Ivanhoé leads Canadian charge into U.S. commercial real estate

JACQUELINE NELSON

Canada’s largest institutional investors are flocking to the U.S. commercial real estate market, elbowing aside competitors for prominent properties in cities such as New York, Chicago and San Francisco.

The investment hit a new high in 2015 as Montreal-based Ivanhoé Cambridge and a partner bought a landmark office building called Three Bryant Park in New York City for $2.2-billion (U.S.) – a deal set to be the largest U.S. acquisition of a property ever made by a Canadian investor, according to data from Thomson Reuters.

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Proxy firm advises Aberdeen shareholders to replace Bharti

JACQUIE McNISH

Influential proxy research firm Institutional Shareholder Services Inc. (ISS) recommends that shareholders of Aberdeen International Inc. vote to replace long-standing director Stan Bharti with an activist shareholder who is protesting lucrative deals and compensation practices with company insiders.

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Pain keeps spreading in the oil patch

CARRIE TAIT

Falling oil prices have made the situation so grim for energy firms in the oil patch that they are proving there is more than one way to cut a budget.

Lightstream Resources Ltd. put a new twist on budget revisions. On Monday, it produced a budget covering only the first half of 2015. Lightstream intends to spend about $95-million in the first half of 2015, keeping the market guessing on its plans for the full year. In its original budget, released Dec. 15, the company said it expected to spend between $190-million and $210-million for all of 2015.

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Raymond James hires new head of M&A

TIM KILADZE

Building off a record year for advisory work, Raymond James has hired a new head of mergers and acquisitions.

Craig McDougall joins Raymond James as senior managing director and head of M&A. Most recently, Mr. McDougall worked at National Bank Financial. He has been tasked with building a dedicated advisory team at his new shop.

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Canadian tech fund sees ‘surge’ of IPOs this year

JACQUELINE NELSON

Toronto-based Kensington Capital Partners’ Venture Fund said Monday it was making its first four investments in an effort to profit from the “surge” of technology IPOs it expects this year.

Kensington closed its initial round of funding for $160-million in November 2014 with a mandate to invest in other funds and sometimes in private companies. The Venture Fund is notable for being 33 per cent supported by the Canadian federal government’s Venture Capital Action Plan (VCAP), which launched in 2013 and aims to boost private-sector venture capital investments primarily in Canadian companies.

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Goldcorp to buy gold company chaired by former Barrick CEO

RACHELLE YOUNGLAI

Goldcorp Inc. is set to buy Probe Mines Ltd., a company chaired by former Barrick Gold Corp.’s chief executive for about $526-million, for its gold property in northern Ontario.

The transaction is the first deal for Jamie Sokalsky, who left Barrick as CEO in a management shakeup and became the chairman of Probe in the fall.

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Global Maxfin hires former CIBC trading head as new CEO

TIM KILADZE

Switching gears from his days overseeing equity trading, James Beattie is taking on a new role as chief executive officer.

Starting this month, Mr. Beattie will lead the two companies under the Global Maxfin corporate umbrella. The first, Global Maxfin Capital, is a boutique investment dealer with an expertise in electronic trading; the second, Global Maxfin Investments, is a money manager for retail clients.

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Why one Canadian hedge fund manager is shorting Bill Gross’s firm

SEAN SILCOFF

U.S. bond king Bill Gross started his latest investment outlook letter by warning that when 2015 ends, “there will be minus signs in front of returns for many asset classes.” One Canadian hedge fund manager is betting that Mr. Gross’s warning applies equally to the stock of his new employer, Janus Capital Group.

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National Bank Financial shuffles executive roles

JACQUELINE NELSON

National Bank Financial has re-envisioned the roles of its managers in equities and investment banking.

Under the new structure, Laurent Ferreira, who heads derivatives, will also oversee equity sales and trading. Greg Thompson, who previously oversaw global equities and investment banking, will now devote all of his time to investment banking.

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Gowlings picks up tax partner

JEFF GRAY

Tax lawyer Paul Carenza has left Cassels Brock & Blackwell LLP for the Toronto office of Gowling Lafleur Henderson LLP, his new firm announced on Friday.

Mr. Carenza, who has previously also worked at Ogilvy Renault (now Norton Rose Fulbright LLP) and Lang Michener LLP (now McMillan LLP), acts on various kinds of corporate deals, and Gowlings says he has special expertise in tax matters around executive compensation.

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Independent brokerages to report losses: Analyst

NIALL McGEE

About six months after the price of oil started falling, the effects are rippling out beyond the energy sector. .

As capital markets activity slows and deal flow dries up, a new Bank of Nova Scotia report suggests independent broker-dealers Canaccord Genuity Corp. and GMP Capital Inc. appear to be taking it especially hard.

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