Here are the top reads on deals and financial services over the last week. Have a great weekend.
IPO: Riding the recent surge in Canadian stocks, Minto Apartment REIT priced its initial public offering at the high end of its marketing range, buoyed by exceptionally strong demand from sophisticated Canadian investors. Story (Tim Kiladze, for subscribers)
Financial products: As Canada announces the legalization of marijuana for recreational use, Steve Hawkins, president and co-CEO of Horizons ETF Management Canada Inc. − which launched the world’s first cannabis exchange-traded fund last year − answers 10 questions posed at the Inside ETFs conference on Thursday in Montreal by Inside ETFs CEO John Swolfs. Story (Clare O’Hara)
Mutual fund review: After a half-decade of study and consultations, Canada’s securities regulators have released their final recommendations for changing mutual fund fees – but the proposals fell short of what many industry players expected. Under the new rules, regulators will prohibit deferred sales charges, or DSCs, but they stopped short of banning trailing commissions. Trailer fees, which are embedded commissions paid by mutual-fund companies to compensate financial advisers and firms that sell their funds, were widely viewed as the main target of the regulators’ initial review. Analysis (Tim Kiladze)
It just became clear we’ll never see an investment industry where clients must come first: The dream of creating a standard of transparent, client-focused service in the investment industry died Thursday. It was replaced with a scattering of proposals from a group of provincial securities regulators that will certainly help investors. Notably, advisers would be required to recommend investments to clients that are suitable in cost as well as other factors such as risk. Opinion (Rob Carrick)
Restructuring: Manulife Financial Corp. is retooling its Canadian business, reducing staff and collapsing office space in an effort to cut costs and improve customer service. The Toronto-based insurance and investment company plans to eliminate 700 positions in its Canadian work force over 18 months through a voluntary severance plan and some attrition. Story (Jacqueline Nelson, for subscribers)
Takeovers: Six months into the explosive rise of Canada’s nascent marijuana industry, Aurora Cannabis Inc. has established itself as a bold deal-maker. Underlying this growth is a takeover strategy that’s pretty unconventional. Aurora is the only Canadian marijuana company to launch two billion-dollar takeovers. To secure both, it has relied on the same playbook: Privately negotiating with its targets’ largest shareholders, rather than wooing management or directors. Story (Tim Kiladze and Christina Pellegrini, for subscribers)
New execs: Laurentian Bank of Canada has filled two key roles in its executive ranks, promoting a new chief operating officer from within and plucking its new chief risk officer from Canada’s banking regulator. Story (James Bradshaw, for subscribers)
Listing: Tilray Inc., Canada’s last major privately owned cannabis grower, has applied to go public in the United States. The British Columbia-based company said on Wednesday that it wants to list its stock on the Nasdaq Global Select Market, joining the likes of blue-chip tech giants such as Apple Inc., Microsoft Corp. and Alphabet Inc. It has applied to list under the symbol “TLRY.” Story (Christina Pellegrini, for subscribers)
Trading: “Speed bumps,” or slight delays in trading, can help protect most investors from the predatory tactics employed by high-frequency traders, according to a new study by an economist for the U.S. Securities and Exchange Commission. The study published on Wednesday by financial economist Edwin Hu does not represent the views of the SEC or its commissioners. But it does provide a new data point in the continuing debate about market structure and lends some support to the business models of upstart exchanges such as U.S.-based IEX Group Inc. and Canada’s Aequitas Neo Exchange Inc. Story (Alexandra Posadzki, for subscribers)
Mining: Australian mining exploration and development company Battery Mineral Resources Limited (BMR) is planning to raise $75-million in a public offering on the Toronto Stock Exchange in a bid to cash in on buoyant investor interest in battery metals as consumers increasingly embrace electric cars. Story (Niall McGee, for subscribers)
Venture capital: Vancouver e-commerce technology provider Elastic Path Software Inc. is raising $43-million from American and Canadian investors, with plans to expand its footprint in the growing online retail industry. Story (Josh O’Kane, for subscribers)
Regulatory criticism: Investment regulators are being widely criticized for being too lenient after announcing a $1.1-million settlement with Royal Mutual Funds Inc. for the company offering higher commissions to advisers to sell its own proprietary funds. Ken Kivenko, a prominent investor-rights advocate who assists victims of financial crimes, estimates that as a result of the extra incentive payouts, RBC could have made approximately $122.5- million in revenue for its subsidiary RMFI. He describes the settlement as one of the worst cases he has seen in the industry. “What rational financial institution would not pay a $1.1-million fine if the illegal act that generated more than $122-million in revenue?” Mr. Kivenko says. Story (Clare O’Hara)
Passes away: John Mountain, a director at the Ontario Securities Commission, passed away on Monday morning after a battle with pancreatic cancer at the age of 62. Story (Clare ’O’Hara, for subscribers)
Executive departing: Royal Bank of Canada’s head of global equities, Greg Mills, will retire from the bank at the end of July, giving way to new co-heads who will lead the division. Mr. Mills joined RBC 20 years ago, and his departure adds to a recent reshuffling in the senior ranks of RBC’s investment banking arm after the sudden departure of U.S. capital markets head Blair Fleming earlier this month. Story (James Bradshaw, for subscribers)
Pension executive: Investment Management Corp. of Ontario has found a chief investment officer to kick-start its asset management program as it prepares to court new clients. Story (Jacqueline Nelson, for subscribers)
New venture fund: As the child of immigrant entrepreneurs, George Rossolatos has first-hand experience with how hard business owners are willing to work to build their companies. Mr. Rossolatos’s father came to Canada from Greece, started an auto-repair shop in Ottawa, and drove a taxi at night to help pay the bills. His son, the founding chief executive of the newly launched Canadian Business Growth Fund, began helping out by the age of 9. Looking back, the 46-year-old financier says a patient, long-term outside investor would have made a world of difference in building his father’s businesses. Story (Andrew Willis, for subscribers)
New TD advisor: U.S. President Donald Trump will almost certainly follow through on threats to impose tariffs on auto imports, heaping more pressure on Canada and Mexico to make concessions as North American free-trade agreement talks enter the crucial next phase, says former cabinet minister Rona Ambrose, a member of Ottawa’s NAFTA advisory council. Ms. Ambrose spoke to The Globe and Mail ahead of an announcement on Tuesday that she will become an adviser to TD Securities on a range of issues, using her experience in politics, trade, economics, the environment and gender diversity. The new non-staff position follows her appointment last year to the NAFTA council, which includes business, political and diplomatic leaders. Story (Jeffrey Jones, for subscribers)
Oil M&A: Baytex Energy Corp. has agreed to buy rival oil producer Raging River Exploration Inc. for about $1.4-billion in an all-stock deal that improves the buyer’s debt position while adding a new exploration area. Story (Jeffrey Jones)
Mining M&A: Australian mining company South32 Ltd. is offering $1.8-billion in cash to buy the 83 per cent of Vancouver-based Arizona Mining Inc. it doesn’t already own in a friendly deal. Story (Niall McGee, for subscribers)
Venture capital: Arts impresario David Mirvish is making a significant investment in financial technology firm FundThrough, the modern-day equivalent of the small-business lenders that helped him and his entrepreneur father start their own successful companies years ago. Story (Brenda Bouw)
ANNUAL REPORT ON EXECUTIVE COMPENSATION
Feature story: Why Canadian CEO pay has soared over the past decade: Our special report on executive compensation. Story (Janet McFarland, for subscribers)
How much are Canada’s top CEOs paid? Here’s the full breakdown
Interactive: Pay vs. performance: How do Canada’s CEOs stack up?
MORE DEALS NEWS FROM FRIDAY
Auto industry: Renault SA absorbing Nissan Motor Co. and Mitsubishi Motors Corp. is not an option as the automakers look to strengthen their partnership while retaining their autonomy, alliance chairman Carlos Ghosn said on Friday. Story
Eyewear: Ray-Ban owner Luxottica said on Friday it had bought the world’s top manufacturer of optical glass sun lenses Barberini in a €140-million deal. Story
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