Sleep Country, founded by Stephen Gunn, Christine Magee and Gord Lownds in Vancouver in 1994, has 215 stores across eight Canadian provinces, including 47 outlets in Quebec under the Dormez-vous? brand.Deborah Baic/The Globe and Mail
BUSTED DEAL OF THE DAY
Sleep Country Canada Holdings Inc.'s secondary stock offering has run into trouble, according to sources close to the underwriters.
The $185-million deal, which was announced Monday after the close, had to be repriced to $17.75 a share from $18.50 – a discount of 4 per cent.
TD Securities Inc. and BMO Nesbitt Burns Inc. led the transaction that saw private equity company Birch Hill Equity Partners Management Inc. offload some of its holdings.
Since it was structured as a bought deal, Birch Hill bore no risk. The repricing and reduction in profit will be eaten by the underwriters who bought the stock from Birch Hill. Underwriters will earn a commission of 4 per cent on the deal, so if they can get the stock off their books they will essentially have worked for free.
HEDGE FUNDS
A senior manager at the U.S. fund that holds considerable sway in the future of Canadian newspaper publisher Postmedia Network Canada Corp. is stepping away from his duties for 2016.
Steven Shapiro is founding partner and senior portfolio manager at GoldenTree Asset Management, a New York-based hedge fund that manages more than $23-billion (U.S.) in assets and specializes in high-risk stocks and debt. He plans to take a one-year sabbatical from GoldenTree for personal reasons, starting in January.
He will also give up his seat on Postmedia's board of directors, which he has held since the company emerged from CanWest Global Communications Corp.'s bankruptcy in 2010. Postmedia has nominated Ted Lodge, a partner at GoldenTree and a specialist in restructurings and turnarounds, to take the vacant seat, with a vote scheduled for mid-January.
STREET MOVES
Dundee Corp. nabs another Scotiabank employee for new wealth management business
David Goodman has hired back yet another ex-Dundee employee from Bank of Nova Scotia to help him rebuild the wealth management business.
On Tuesday, Dundee Corp. announced that Adam Donsky will start in January as chief investment officer at Goodman & Company Investment Counsel Inc., a wholly owned subsidiary.
Mr. Donsky was a long-time portfolio manager with Dynamic Funds – formerly owned by Dundee Corp. At Scotiabank, he oversaw the high-net-worth client group.
Mr. Donsky is the fourth former Dundee Wealth Inc. employee to make it back to the mothership. (Dundee Corp. sold Dundee Wealth to Scotiabank in 2011.)
"We are delighted to have Adam back," Mr. Goodman, chief executive officer of Dundee Corp., said in an e-mail.
STOCK EXCHANGES
TMX to revamp Venture Exchange
TMX Group Ltd. says it is planning on revamping the TSX Venture Exchange (TSXV) to "improve the client experience," enhance liquidity and "increase the attractiveness of the marketplace to early-stage companies."
The company, which also operates the senior Toronto Stock Exchange, intends to publish a white paper in the coming weeks that will map out specific improvements it has in store. TMX says the paper will outline ways to "reduce the administrative burden to TSXV issuers without compromising investor confidence."
Jos Schmitt, chief executive officer of Aequitas Innovations Inc., which operates a number of stock exchanges that compete against TMX's exchanges, has been critical of the incumbent's business. In August, he blamed TMX for a "liquidity crunch" in Canada, claiming that there are thousands of securities on TMX's exchanges "that are barely experiencing any liquidity."
In an interview with The Globe and Mail in August, TMX CEO Lou Eccleston said TSXV needed to be "reimagined." He also said he was well aware of the criticism around the lack of liquidity on the exchange.
"All the critics will sit there and say well there's this tiny little company that I never see it trade, what are they there for?" he said.
However, he also signalled that lack of liquidity isn't necessarily a major problem for a small-capitalization company on the TSXV.
"As a company that can do a capital raise and goes and successfully completes its activity, whether it's a mine or a well or whatever it is, well then they succeeded. Does it matter that they didn't trade a lot if their goal is to raise capital?"
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Niall McGee