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Streetwise

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

Cenovus shares tumble after $17.7-billion ConocoPhillips deal

JEFF LEWIS and ANDREW WILLIS

Cenovus Energy Inc. shares tumbled a day after the company agreed to buy most of ConocoPhillips Co.’s oil sands assets in a $17.7-billion cash-and-stock deal.

Shares of the Calgary-based oil sands producer were down more than 13 per cent, falling to around $15.17 midday in Thursday’s session on the Toronto Stock Exchange.

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Streetwise newsletter: Cenovus buys ConocoPhillips assets; Manulife promotes Asian head to president

Cenovus Energy Inc. is paying $17.7-billion in cash and shares for oil sands and other assets owned by ConocoPhillips Co. in the second major consolidation in the oil patch this month.

Calgary-based Cenovus said late on Wednesday it is acquiring the 50 per cent of the companies’ oil sands joint venture that it does not already own. That includes interests in the steam-driven Foster Creek and Christina Lake projects. The deal also includes assets in the Deep Basin region of Alberta and British Columbia.

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Lexpert: Bill C-25 amendments will reinforce trend toward shareholder democracy

LEXPERT

In September, 2016, Navdeep Bains, the federal Minister of Innovation, Science and Economic Development, introduced Bill C-25, which if enacted will make significant changes to the governance of public companies incorporated under the Canada Business Corporations Act.

The CBCA amendments, which have passed second reading in the House of Commons, are now awaiting review by the Standing Committee on Industry, Science and Technology. While far from a revolution in corporate governance, Bill C-25’s amendments to the CBCA will reinforce the trend toward increased shareholder democracy and the slow advance toward director diversity.

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Manulife promotes head of Asian unit to president; succession back in focus

JACQUELINE NELSON

Manulife Financial Corp. has promoted the head of its Asian division to a new leadership position, bringing a renewed focus on succession planning to the country’s largest insurer.

Australian-born Roy Gori is set to take over as Manulife’s president as of June 5. He will oversee investments and the company’s global operations in Canada and the United States, in addition to Asia.

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Home Capital shares sink; a renewed push for lobbying transparency

Shares of Home Capital Group Inc. tumbled nearly 10 per cent Tuesday, as investors gave their verdict on the company’s decision to sack chief executive officer Martin Reid after less than a year in the job.

Mr. Reid was terminated Monday, making way for director Bonita Then to take over as interim president and CEO.

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Streetwise newsletter: Scotiabank, TD review practices; Schulich bumps up stake in Birchcliff

At least two of Canada’s largest banks audited their own sales practices last year, taking extra measures after a damaging sales scandal engulfed U.S.-based Wells Fargo & Co.

Major banks in Canada have come under closer scrutiny in recent weeks after media reports alleged that some front-line staff felt pressure to meet ambitious sales targets. With complaints rising, the Financial Consumer Agency of Canada (FCAC) has promised to review sales practices, focusing on bank employees’ obligation to get customer consent and disclose fees and costs when selling new products.

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Seymour Schulich bumps up stake in Birchcliff Energy with share purchase

RACHELLE YOUNGLAI

Seymour Schulich wants to bolster his position in Birchcliff Energy Ltd. but has no plans to acquire much more in his other energy investment, Pengrowth Energy Corp.

The former mining executive has been increasing his holdings in the two energy companies amid the commodities downturn. His most recent purchase, announced on Monday, was 2.5 million shares of Birchcliff, which bumped up his stake in the company to 14.2 per cent.

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Veteran RBC analyst joins Teck Resources

NIALL McGEE

Long-time mining analyst Fraser Phillips has left RBC Dominion Securities Inc. for a corporate-sector job.

Mr. Phillips began a new role on Monday at Vancouver-based Teck Resources Ltd. He’ll serve as the base-metals miner’s senior vice-president of investor relations and strategic analysis.

An analyst leaving capital markets for industry is not unusual, and is a theme that has tended to play out in waves over the past few years. In 2013, for example, roughly 15 Calgary-based analysts left research for corporate roles.

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Geoff Beattie, Ed Sonshine stepping down as RBC directors

NIALL McGEE

Geoff Beattie and Ed Sonshine are stepping down as board members at Royal Bank of Canada.

In a recent regulatory filing, RBC disclosed that Mr. Beattie and Mr. Sonshine, directors since 2001 and 2008, respectively, are not standing for re-election at the bank’s annual meeting next month.

“On behalf of the board, we thank Geoff Beattie and Ed Sonshine for their years of dedicated service as directors,” RBC wrote in the filing.

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Streetwise newsletter: Last week’s best reads: Budget, Libor, oil services

Federal budget measures aim to toughen money laundering rules


The federal government is taking steps to clean up Canada’s act when it comes to anti-money laundering and terrorist financing laws, though details about the expected changes are scarce.


The federal budget released Wednesday includes a trio of proposed changes to anti-money laundering laws and regulations “to support a resilient financial sector.” Story

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Streetwise newsletter: Federal budget tackles money laundering; Canada joins Asian infrastructure bank

The federal government is taking steps to clean up Canada’s act when it comes to anti-money laundering and terrorist financing laws, though details about the expected changes are scarce.

The federal budget released Wednesday includes a trio of proposed changes to anti-money laundering laws and regulations “to support a resilient financial sector.”

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Federal budget measures aim to toughen money laundering rules

JAMES BRADSHAW

The federal government is taking steps to clean up Canada’s act when it comes to anti-money laundering and terrorist financing laws, though details about the expected changes are scarce.

The federal budget released Wednesday includes a trio of proposed changes to anti-money laundering laws and regulations “to support a resilient financial sector.”

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Face of Libor rate manipulation scandal cost RBC millions

A jailed former banker who became the face of the Libor rate manipulation scandal left behind faulty trading models and millions of dollars in losses when he quit his job at Royal Bank of Canada years earlier, a new book reveals.

Tom Hayes, a former trader at UBS AG and Citigroup Inc., was one of the only bankers sent to prison for crimes stemming from the global financial crisis. He helped mastermind the manipulation of an interest-rate benchmark that affects trillions of dollars of loans, mortgages and derivatives contracts around the world. An international investigation started in 2012 revealed widespread manipulation by multiple banks, which were slapped with billions of dollars in fines.

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Face of Libor rate manipulation scandal cost RBC millions

JAMES BRADSHAW

A jailed former banker who became the face of the Libor rate manipulation scandal left behind faulty trading models and millions of dollars in losses when he quit his job at Royal Bank of Canada years earlier, a new book reveals.

Tom Hayes, a former trader at UBS AG and Citigroup Inc., was one of the only bankers sent to prison for crimes stemming from the global financial crisis. He helped mastermind the manipulation of an interest-rate benchmark that affects trillions of dollars of loans, mortgages and derivatives contracts around the world. An international investigation started in 2012 revealed widespread manipulation by multiple banks, which were slapped with billions of dollars in fines.

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Lexpert: Yukon Supreme Court allows InterOil sale to Exxon Mobil

LEXPERT

A Yukon Supreme Court decision has allowed Exxon Mobil Corp. to purchase InterOil Corp. after the plan of arrangement was scuppered by the Yukon court of appeal in November.

The appellate court found that a one-line fairness opinion provided to InterOil’s shareholders was insufficient to allow those shareholders to “make an informed choice” about the transaction.

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Oil-services party comes to a quick end

All was right with the energy world as the new year dawned, no more so than in the bruised oil-field service sector.

The industry finally looked like it was emerging from two years of slashing rates, reporting losses and cutting staff. Oh, to return to those innocent days of late December.

Oil and gas prices had climbed and energy-company clients fattened their drilling budgets, prompting oil-service providers to call idled crews back to work. Private-equity investors even readied the apparatus to take companies public.

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Lexpert roundup: The Exxon-Mobil-Interoil deal; Canadian dealmakers of 2016

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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Oil-services party comes to a quick end

JEFFREY JONES

All was right with the energy world as the new year dawned, no more so than in the bruised oil-field service sector.

The industry finally looked like it was emerging from two years of slashing rates, reporting losses and cutting staff. Oh, to return to those innocent days of late December.

Oil and gas prices had climbed and energy-company clients fattened their drilling budgets, prompting oil-service providers to call idled crews back to work. Private-equity investors even readied the apparatus to take companies public.

More »

Dominion Diamond in play following Washington Cos. takeover proposal

ANDREW WILLIS

Dominion Diamond Corp. is expected to attract interest from the world’s largest diamond miners after being put in play Sunday by a $1.1-billion [U.S.] hostile takeover proposal from conglomerate The Washington Companies.

Yellowknife-based Dominion owns stakes in the Ekati and Diavik diamond mines in the Northwest Territories, and caught the eye of the private Montana-based company controlled by billionaire Dennis Washington, who made his fortune in construction and now owns tugboats, trains and copper mines.

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Last week’s best reads: Onex, Valeant, oil IPOs, Painted Pony

Sprott hostile bid raises eyebrows over governance of dual-share firms

Money manager Sprott Inc. is attempting the corporate finance equivalent of a Hail Mary pass in its $3.1-billion (U.S.) hostile bid of rival Central Fund of Canada Ltd.

The takeover is likely to fall short, according to lawyers watching this contest, but if Sprott does win out, it would change the landscape for the long list of Canadian companies that feature dual classes of shares.

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Caisse, KKR eye growth for insurance brokerage business as Onex cashes out

JACQUELINE NESLON

The Caisse de dépôt et placement du Québec is taking the long view in its latest deal to buy an acquisitive insurance-brokerage business from private equity backer Onex Corp.

The Quebec-based pension fund and private equity firm KKR & Co. said Friday that they would jointly acquire USI Insurance Services in a deal valued at $4.3-billion (U.S.), including debt .The company is among the largest property- and casualty-insurance brokerages in the United States and is focused on small and medium-sized businesses.

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Sprott hostile bid raises eyebrows over governance of dual-share firms

Andrew Willis

Money manager Sprott Inc. is attempting the corporate finance equivalent of a Hail Mary pass in its $3.1-billion (U.S.) hostile bid of rival Central Fund of Canada Ltd.

The takeover is likely to fall short, according to lawyers watching this contest, but if Sprott does win out, it would change the landscape for the long list of Canadian companies that feature dual classes of shares.

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Painted Pony to buy IPO candidate Unconventional Gas

Jeff Lewis

A Montney natural-gas producer tipped as a potential candidate for an initial public offering has agreed to sell itself instead.

Calgary-based Unconventional Gas Resources (UGR), backed by private-equity firms ARC Financial Corp. and Houston-based EnCap Investments LP, was among several producers in the British Columbia exploration zone said to be on track for a public stock sale.

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Parka maker Canada Goose raising $340-million in IPO

CHRISTINA PELLEGRINI

Pricey parka maker Canada Goose Holdings Inc. is raising $340-million in an initial public offering, becoming the third Canadian consumer brand to go public since last October.

The Toronto-based company is selling 20-million subordinate voting shares for $17 each, pricing them above its expected $14 to $16 range, Canada Goose said late Wednesday in a press release. The stock will be dual listed on both the Toronto Stock Exchange and New York Stock Exchange under the symbol “GOOS.” It will start trading in both markets on Thursday.

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Amid falling oil prices, two energy service firms take different approaches to IPOs

JEFF LEWIS And CHRISTINA PELLEGRINI

Two Canadian energy service firms mulling initial public offerings are taking different approaches amid falling oil prices, with one forging ahead with its plans to make a public debut while the other is slamming on the brakes.

Source Energy Services Ltd., a TriWest Capital Partners company which produces sand used for hydraulic fracturing, is proceeding with marketing its stock sale and has plans to price its shares within the next week, according to one source familiar with the matter. The Calgary-based company said earlier this month that it aims to raise $300-million.

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Western Energy Services ups its bid for Savanna

JEFFREY JONES

Western Energy Services Corp. has upped the ante in the takeover battle for Savanna Energy Services Corp.

Western said on Wednesday it has added a 21-cent-a-share cash sweetener to its friendly offer of 0.85 of a Western share for each Savanna share.

The increase puts the value of its bid at $254-million based on Wednesday market prices and adds some of the safety of cash, which is a feature of a hostile rival offer from Total Energy Services Inc. That bid is currently worth about $226-million.

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Seven Generations lands supply deal with Louisiana LNG firm amid push for new suppliers

Jeff Lewis

Seven Generations Energy Ltd. is about to succeed where some of the energy industry’s biggest companies have failed.

Industry sources say the Alberta Montney gas producer has signed a supply deal with U.S. LNG producer Cheniere Energy Inc. that will see growing production from its Kakwa River project exported from a Louisiana port.

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Valeant still under pressure to speed up turnaround, even after Ackman sells stake

CHRISTINA PELLEGRINI

Joseph Papa can breathe a sigh of relief that he’s no longer under pressure to turn around Valeant Pharmaceuticals International Inc. at a pace that suits U.S. hedge fund investor Bill Ackman. But make no mistake: the chief executive officer of the troubled Canadian drug maker is still under the gun.

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Foreign oil players make a bet that locals can turn it around

JEFFREY JONES

Almost lost in the economic and political squabbling that followed Royal Dutch Shell PLC’s sale of its oil sands assets to Canadian Natural Resources Ltd. was one of the deal’s most telling aspects.

Shell is making a $4-billion bet on CNRL and its ability to thrive in a tough business as the Anglo-Dutch oil major retreats to work on chipping away at its sizable debt and focusing on quicker-return opportunities.

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Tanzania export ban threatens merger of Barrick subsidiary, Endeavour Mining

GEOFFREY YORK

A Tanzanian export ban has cast a shadow of doubt over a potential $4-billion (U.S.) merger between a Barrick Gold Corp. subsidiary and Toronto-listed Endeavour Mining Corp.

Toronto-based Barrick has been hunting for a buyer for its African subsidiary, Acacia Mining. The possible Endeavour deal could reduce its majority stake in Acacia to a minority holding, but the deal might now be delayed or scuttled by Tanzania’s unexpected move to freeze the export of gold and copper ore.

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