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Here are the top reads on deals and financial services over the last week. Enjoy your weekend!

Downfall of a deal-making duo: In the fall of 2016, Larry and Phillip Smith, the father-son duo in charge of Vaughan, Ont.-based PACE Savings & Credit Union Ltd., hit a snag as they worked on a plan to buy a currency exchange business. The seller was offering a 75-per-cent stake. A transaction of that size would require consent from the Deposit Insurance Corp. of Ontario, or DICO. Rather than ask permission, the two men allegedly devised a way to work around the provincial regulator, according to court filings. On Dec. 7, 2016, PACE chief executive Phillip Smith e-mailed his father, suggesting that “we do our best to keep this [deal] arms’ length." Story (James Bradshaw, for subscribers)

Onex’s art of the deal: For Gerry Schwartz, bland is good for business. But is it enough in the face of new challenges? Onex and its brilliant founder have an astonishing 35-year track record. The challenge for investors is figuring out what’s happening from year to year. ROB Magazine (David Berman, for subscribers)

The Liberals’ CMHC mortgage madness is another subprime crisis waiting to happen: Are you a first-time homebuyer who is feeling priced out of the market? Don’t worry about saving more money—go see Cammy the Mortgage Closer instead. You probably know the agency, officially known as the Canada Mortgage and Housing Corp. (CMHC), as the federal mortgage insurer. But starting in September, it will also offer home loans to help property newbies just like you. ROB Magazine (Rita Trichur, for subscribers)

Why RBC is becoming the New England Patriots of Bay Street: It’s time to acknowledge that when it comes to investment banking, RBC Capital Markets is playing in a different league than its Canadian rivals. The deal-making arm of Royal Bank of Canada churned out $8.4 billion in revenue last year, almost as much as its second- and third-ranked domestic competitors put together. In the same way it seems preordained that football’s New England Patriots will be Super Bowl favourites every year, it now appears certain that RBC Capital Markets will make far more money than any other Bay Street dealer. ROB Magazine (Andrew Willis, for subscribers)

TransAlta deal with Brookfield Renewable to proceed as planned despite dissident suit: TransAlta Corp. won’t entertain new talks with a U.S. activist investor after it filed a lawsuit seeking to stop the power producer’s $750-million partnership deal with Brookfield Renewable Partners LP, TransAlta’s chairman says. The deal with Brookfield, aimed at speeding up TransAlta’s shift to gas from coal-fired power, will close as planned next week, chairman Gordon Giffin said at the annual meeting on Friday. Story (Jeffrey Jones, for subscribers)

Quebec’s securities watchdog clears Bombardier in probe of executive stock-sale program: Quebec’s securities watchdog has cleared Bombardier Inc. of any wrongdoing in a probe of its executive stock-sale program but said the plane and train maker should consider scrapping the controversial plan. The regulator was not able to identify any violation of securities law by Bombardier or its senior executives during the implementation of the company’s automatic share-disposal program (ASDP), the Autorité des marchés financiers said in a statement Friday. But the regulator, known as the AMF, said the company should weigh whether to keep it. Story (Nicolas Van Praet)

IIROC recommends new enforcement rules to resolve some cases more quickly: Canada’s securities regulator is recommending new enforcement rules for the investment community that would resolve certain cases more quickly and impose a standard fine for minor violations where investors have not been harmed. Story (Clare O’Hara, for subscribers)

A blessing for dividend investors: Debt ratings giant S&P shifts view on Canada’s telecom giants: Rating agency Standard and Poor’s is relaxing its recent warnings about the debt burdens shouldered by Canada’s largest telecom companies, easing the financial pressure on BCE Inc., Rogers Communications Inc. and Telus Corp. as they spend tens of billions of dollars to build out their 5G networks. S&P’s rationale, in a nutshell, is a rather Canadian one. Story (Tim Kiladze, for subscribers)

Knight Therapeutics needs more independent directors, proxy advisory firm ISS says amid activist battle: An independent proxy advisory firm is recommending that Montreal-based drug company Knight Therapeutics Inc., which is in the midst of an activist battle with shareholder Medison Biotech Ltd., elect more independent directors to its board. Institutional Shareholder Services, or ISS, is also recommending that shareholders vote against Medison CEO Meir Jakobsohn, who has sat on Knight’s board since the two companies took ownership stakes in one another in 2015, at the company’s annual meeting on May 7. Story (Alexandra Posadzki, for subscribers)

RBC to issue first green bond as part of $100-billion sustainable-financing plan: RBC is issuing its first-ever green bond, a €500-million ($752-million) five-year debt offering that will primarily be used to fund renewable-energy projects and sustainable buildings. Story (Alexandra Posadzki, for subscribers)

DBRS downgrades Saputo’s credit rating over Dairy Crest acquisition: Canadian dairy giant Saputo Inc. has had its credit rating slashed after completing its $1.7-billion acquisition of Britain-based Dairy Crest Group plc. Credit-rating agency DBRS said it has downgraded both the company’s rating and that of Saputo’s senior unsecured notes to BBB (high) from A (low). Story (Alexandra Posadzki, for subscribers)

Coastal Contacts founder Roger Hardy back in eyewear business with Toronto acquisition: Vancouver entrepreneur and financier Roger Hardy is getting back into the online eyewear business, five years after selling his publicly traded Coastal Contacts Inc. for $430-million. Mr. Hardy’s investment firm Hardy Capital announced Wednesday that it has purchased privately held LD Vision Group, a 17-year-old Richmond, B.C.-based company that it described as North America’s second largest independent direct retailer in eye care, with sales of about $50-million last year. Story (Sean Silcoff, for subscribers)

National Bank chief says SNC-Lavalin deserves a deferred prosecution agreement: One of SNC-Lavalin Group Inc.’s principal lenders says the engineering firm has paid the price for wrongdoing committed by former employees and deserves a negotiated settlement to avoid a trial on criminal charges. Story (Nicolas van Praet and James Bradshaw, for subscribers)

National Bank looks abroad to meet renewable-energy lending targets: National Bank of Canada faces a stumbling block as it seeks to boost its investment in renewable energy: It can’t find enough projects in Canada to meet its lending targets. Story (James Bradshaw, for subscribers)

Canada’s banking regulator promotes Ben Gully to key post: Canada’s banking regulator has named Ben Gully as its next assistant superintendent, regulation sector, promoting from within to fill a key role. Story (James Bradshaw, for subscribers)

Activist investor sues TransAlta in effort to stop $750-million Brookfield deal: A U.S. activist investor is suing TransAlta Corp. in bid to stop the power producer’s $750-million partnership deal with Brookfield Renewable Partners LP, claiming executives and directors are putting their own interests above those of shareholders. Story (Jeffrey Jones, for subscribers)

The good advisers out there did this for their clients in early 2019: Last year was a test for investment advisers, and it’s only partly because the markets were generally garbage. The real challenge for advisers: Did they reach out to clients to discuss what the sharp decline in stocks meant to their financial plan? In the J.D. Power 2019 Canada Full Service Investor Satisfaction Study, overall levels of client satisfaction with their advisers declined slightly. Story (Rob Carrick, for subscribers)

Advocacy group for Canadian investors struggles for funding and survival: The primary advocacy group for Canadian investors is losing money, looking for an executive director – and struggling to survive. “We’re in a bit of an existential crisis,” said Ermanno Pascutto, the founder and, now, interim executive director of the Canadian Foundation for the Advancement of Investor Rights, known as FAIR Canada. Story (David Milstead, for subscribers)

National Bank of Canada loses tech bankers to rivals: Two key members of National Bank of Canada’s technology banking team are leaving to join rivals just as competition heats up to be the bank of choice to emerging tech companies, according to sources familiar with the moves. Story (James Bradshaw, for subscribers)

Canadian green bond market expands with push to environmentally friendly projects: The Canadian green bond market is expanding as more companies are looking to raise money to fund environmentally friendly projects. Story (Alexandra Posadzki, for subscribers)

Chinese investment in Canada’s hotel industry falls: Beijing’s crackdown on foreign investments is deterring Chinese companies from making large purchases of Canadian hotels. Story (Rachelle Younglai, for subscribers)

Canada must develop a services economy: Canadians can be proud of our place in the world. We are a leader in quality of life and we can point to a solid record of economic growth. We owe this strong and stable position largely to three traditional pillars of our economy. Natural resources are our competitive advantage – though one we are putting at risk unless we find ways to build the vital links needed to get our energy (both renewable and non-renewable) to more markets globally. In financial services, including banking, insurance and related industries, we are proven international leaders. Opinion (Victor Dodig)


Intel reportedly considering sale of modem business; held talks with Apple: Intel Corp is exploring strategic options for its modem chip business, including a possible sale to Apple or another acquirer, the Wall Street Journal reported on Friday, citing people familiar with the matter. Story (Reuters, for subscribers)

Uber tempers expectations with target IPO valuation of up to US$91.5-billion: Uber Technologies Inc, the world’s largest ride-hailing company, plans an initial public offering that values the company as much as one-third below what the startup’s insiders had hoped for, between US$80.5 billion and US$91.5 billion. Story (Reuters, for subscribers)

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