Here are the top reads on deals and financial services over the last week. Have a great weekend,
Saputo eyes possible acquisitions in U.S. dairy industry: Lino Saputo Jr. and his father have built one of the world’s largest dairy companies with a string of more than 30 successful acquisitions. The 52-year-old CEO’s next takeover may be his toughest challenge to date. Just about every analyst who covers Saputo Inc. says a team from the Montreal-based company is currently going through the books of Dean Foods Co., the largest U.S. milk producer and owner of 50 brands of sour cream, butter and ice cream. Story (Andrew Willis, for subscribers)
Shareholders’ Say on Pay to have strength of federal law behind it: A decade-long battle to make Canadian companies get their shareholders’ feedback on compensation plans will soon have the force of law. Ottawa has introduced a mandatory “Say On Pay” provision for all federally incorporated companies as part of the Budget Implementation Act. Under the amendments to the Canada Business Corporations Act (CBCA), companies must present their “approach to remuneration” to shareholders each year, conduct a vote on it, and disclose the results. Story (David Milstead, for subscribers)
Bay Street executive William Wilder was a master networker when published: William Wilder, who has died at 96, was one of the most powerful men on Bay Street from the 1950s to the 70s, helping build Wood Gundy into what was then the largest brokerage and corporate-finance firm in Canada. Story (Fred Langan, for subscribers)
Manulife shakes up senior ranks amid digital shift: Manulife Financial Corp. is making major changes to its senior ranks as chief operating officer Linda Mantia makes plans to leave the company this summer, according to people familiar with the matter. Story (James Bradshaw, Clare O’Hara and Tim Kiladze, for subscribers)
U.S. activist investors to withhold votes for three of TransAlta’s directors in battle over Brookfield partnership: U.S. activist investors plan to withhold their votes for three of TransAlta Corp.’s directors, including the chairman, in an escalating battle over the power generator’s $750-million partnership deal with Brookfield Renewable Partners LP. Story (Jeffrey Jones, for subscribers)
Canada’s big banks preparing for worst-case Brexit scenario, with some taking steps to bolster Dublin offices: Canada’s big investment banks are preparing for the possibility of a worst-case Brexit scenario, with some taking steps to bolster their Dublin offices in case Britain is not able to strike a deal with the European Union before the new Halloween deadline. Story (Alexandra Posadzki, for subscribers)
Transcontinental defends sale of East Coast newspapers to SaltWire in wake of lawsuit: Printing, packaging and media company Transcontinental Inc. is fighting allegations that it had misrepresented information about its business in the 2017 sale of its East Coast newspapers. Story (Susan Krashinsky Robertson)
Newmont shareholders back $10-billion Goldcorp takeover: Newmont Mining Corp. shareholders have voted resoundingly in favour of the company’s US$10-billion acquisition of Vancouver’s Goldcorp Inc., removing the last major obstacle to what will likely be the second-biggest deal ever in the gold sector. Story (Niall McGee)
BMO restructures capital markets leadership, makes multiple cuts: Bank of Montreal has revamped its capital markets leadership team, making changes across its trading and investment banking units. Story (Tim Kiladze and James Bradshaw, for subscribers)
Shareholder groups support proposal to abolish Bombardier’s dual-class share structure: Two proxy advisory firms are backing a proposal to abolish Bombardier Inc.'s dual-class share structure in a move that could reignite investor opposition to the founding family’s control over the Canadian plane and train maker. Story (Nicolas Van Praet, for subscribers)
Why shorting the Canadian banks on housing makes no sense: When Steve Eisman warns about a downturn, investors listen – so his recent bet against Canadian banks is getting a lot of attention. Famous for his prescient call against the United States housing market before the 2008 global financial crisis, one of the fantastically profitable wagers profiled in The Big Short, Mr. Eisman, a fund manager, is now predicting trouble for Canada’s largest lenders. Story (Tim Kiladze and James Bradshaw, for subscribers)
Top links: Canadian banks ‘ill-prepared’ for turn in credit cycle, says short seller: “Canada has not had a credit cycle in a few decades," Eisman, portfolio manager at Neuberger Berman, told BNN Bloomberg in a Tuesday interview. "I don’t think there’s a Canadian bank CEO that knows what a credit cycle really looks like. I just think, psychologically, they’re extremely ill-prepared. And, given how low the risk weights on their balance sheets are. I think they’re unprepared for how much their capital ratios could go down if there’s just a simple normalization of credit, not a calamity, just a simple normalization of credit.” Story (Scott Barlow, for subscribers)
Two investment managers threatened with lawsuit over ‘closet indexers’: Two of Canada’s largest investment managers are being threatened with a class-action lawsuit that claims investors were overcharged for actively managed mutual funds that did little more than mimic their benchmark indexes. Story (Clare O’Hara, for subscribers)
Scotiabank spending $300-million a year in anti-money-laundering efforts: Bank of Nova Scotia is spending about $300-million annually to combat money laundering even as it pulls out of some riskier markets, at a time when Canada’s government is promising new resources to fight financial crime. The bank’s chief executive officer, Brian Porter, voiced support for an array of new measures unveiled by the federal government in last month’s budget, speaking to reporters after Scotiabank’s annual meeting of shareholders on Tuesday. Story (James Bradshaw, for subscribers)
Activist investors demand TransAlta hold a vote on Brookfield deal: Activist investors want to force power generator TransAlta Corp. to postpone its annual shareholders’ meeting and are demanding the company hold a vote on its $750-million deal with Brookfield Renewable Partners LP, which the dissidents say was thrown together hastily. In what has become a heated scrap over corporate direction, Mangrove Partners has applied to the Ontario and Alberta securities commissions, seeking a vote on the transaction among TransAlta shareholders who are not connected with Brookfield or other deal insiders. Story (Jeffrey Jones, for subscribers)
Smaller Canadian stock exchanges vie for cannabis listings: The anticipated rush of listings by U.S. cannabis companies has ignited a rivalry between two of Canada’s smaller stock markets as they vie to fill the void created by the Toronto Stock Exchange. The TMX Group – which owns both the Toronto Stock Exchange and TSX Venture Exchange – has a policy preventing listed companies from operating south of the border, where marijuana remains federally illegal despite having been legalized in more than 30 states. Story (Alexandra Posadzki, for subscribers)
Female executives are still scarce in Corporate Canada. The few who made it are fed up: As a final act after 26 years with KPMG Canada, Beth Wilson fired off an e-mail to her female colleagues, clearing the air on what prompted her to pack up and leave. “I reached for the top rung and failed,” she wrote in a heartfelt exit note in 2017. “Yes, I just used the F-word and I am okay with that.” The year before, she’d put herself in the running to be the firm’s next chief executive, the first woman to ever do so, but ultimately lost to a man. Because she felt worthy of being a CEO, Ms. Wilson left the firm with nowhere to go. Story (Tim Kiladze, for subscribers)
First Nations group offers to buy stake in Coastal GasLink pipeline: A newly formed group representing 20 elected First Nation councils will present an offer on Tuesday to buy a 22.5-per-cent stake in TransCanada Corp.'s Coastal GasLink pipeline project in British Columbia. First Nation Leadership Group (FNLG) said having elected band councils serve as co-owners of Coastal GasLink would strengthen the $6.2-billion project, which is designed to transport natural gas from northeast B.C. to the planned LNG Canada terminal in Kitimat on the West Coast. Story (Brent Jang, for subscribers)
Judge backs order to transition Quadriga proceedings into bankruptcy case: A Nova Scotia judge overseeing the restructuring of Canadian cryptocurrency exchange QuadrigaCX said he will approve an order to transition the proceedings into a bankruptcy case. Quadriga Fintech Solutions, which owned and operated the QuadrigaCX trading platform, was granted creditor protection earlier this year after the death of its chief executive, Gerald Cotten. Story (Alexandra Posadzki)
Skyscraper deals keep heat in Canada’s commercial real estate market: Canada’s commercial real estate market is defying expectations, as investors buy skyscrapers in Vancouver, Toronto and Montreal to capitalize on surging demand by tenants for prime urban space. The number of deals was expected to ease this year, due to higher interest rates and concerns over a potential economic slowdown. Story (Rachelle Younglai, for subscribers)
MORE FINANCIAL SERVICES NEWS AND MORE DEALS NEWS FROM FRIDAY
JPMorgan posts better-than-expected quarterly profit, easing fears of recession: JPMorgan Chase & Co. posted a better-than-expected quarterly profit on Friday, easing fears slowing economic growth could weigh on its results. Story (for subscribers)
HSBC has moved a ‘tiny number’ of jobs due to Brexit, CEO says: HSBC has so far moved only a “tiny” number of jobs to Paris in order to deal with Brexit, Chief Executive John Flint said on Friday, in the bank’s most detailed comments yet on its plans. Story
Wells Fargo shares fall as bank cuts forecast for interest income: Wells Fargo & Co. shares fell as much as 3 per cent on Friday after the bank dialled back its net interest income outlook for this year and reported a decline in total quarterly revenue. Story (for subscribers)
Chevron to buy Anadarko Petroleum for $33-billion in cash and stock: Chevron Corp on Friday said it will buy oil and gas producer Anadarko Petroleum Corp for $33-billion in cash and stock in a deal that doubles down on its bet on U.S. shale and LNG as U.S. energy production shatters records. Story (for subscribers)
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