Here are the top reads on deals and financial services over the last week. Have a great weekend!
| Onex to buy wealth manager Gluskin Sheff in $445-million deal: Private-equity firm Onex Corp. is buying Gluskin Sheff + Associates Inc., one of Canada’s last remaining independent wealth managers, in a $445-million deal. The Onex offer of $14.25 per share represents a 28 per cent premium to Friday’s closing price of $11.17, but Gluskin Sheff is agreeing to be sold at less than half its peak value of early 2014. Story (David Milstead and Andrew Willis, for subscribers)
| The frustration of Ed Sonshine – and the enigmatic future for RioCan REIT: As one of the first real-estate investment trusts to list on the Toronto Stock Exchange, RioCan offered ordinary stock pickers the chance to dabble in commercial properties. Cash-strapped retirees were particularly intrigued by the promise of reliable, ever-increasing monthly distributions – especially after interest rates plummeted in the wake of the 2008 financial crisis. From its debut on the TSX in 1994 to its peak value in 2015, RioCan returned a total of 2,408 per cent, including distributions. All of that can feel like it was eons ago. What has transpired in the past four years has been a revolution in retail real estate. Story (Tim Kiladze, for subscribers)
| Goldcorp shares drop amid growing opposition to terms of takeover offer by Newmont: Shares in Goldcorp Inc. came under selling pressure on Friday as a growing cadre of Newmont Mining Corp.’s shareholders voiced opposition to the terms of Newmont’s US$10-billion takeover offer. On Friday, Joe Foster, portfolio manager with VanEck, said concerns raised by New York hedge fund Paulson & Co. have merit and agreed that Newmont was overpaying for Goldcorp. Story (Niall McGee and Rachelle Younglai, for subscribers)
| | | | Story continues below advertisement | | | OSFI official Carolyn Rogers named secretary-general of Basel Committee on Banking Supervision: A top official at Canada’s banking regulator, Carolyn Rogers, has been chosen as the next secretary-general of the Basel Committee on Banking Supervision (BCBS) – the first time a Canadian has held the role. Ms. Rogers is assistant superintendent of the regulation sector at Canada’s Office of the Superintendent of Financial Institutions, and already represents the regulator on the Basel Committee. Story (James Bradshaw, for subscribers)
| Cryptocurrency companies rush to secure audits as firms back away: Cryptocurrency companies are scrambling to get sign-offs on their financial statements after some auditors have backed away from the sector. Accounting firms are shying away due to heightened scrutiny by the board that regulates Canadian auditors, according to the heads of several publicly traded blockchain companies. Story
| RBC iShares launches its first set of ETFs under new partnership: RBC iShares, the country’s largest ETF provider, is debuting its first set of funds since Canada’s largest bank, Royal Bank of Canada, and BlackRock Inc. joined forces earlier this year. BlackRock Asset Management Canada Ltd. and RBC Global Asset Management Inc., under its joint partnership RBC iShares, begin trading six new exchange-traded funds on the Toronto Stock Exchange on Thursday. Story (Clare O’Hara)
| Economical Mutual Insurance moves closer to $1.9-billion IPO: Economical Mutual Insurance Co. is one step closer to a proposed $1.9-billion initial public offering after a first group of policyholders voted 99 per cent in favour of the insurer’s demutualization plans. Story (Clare O’Hara and Andrew Willis, for subscribers)
| Federal government looks to quash tax loophole for ETFs in new budget: The federal government is moving to close a loophole that allows investors in certain exchange-traded funds to defer taxes, but the main provider of the products says it’s too early to know what the eventual impact of the proposed legislation will be. Story (John Heinzl and Brenda Bouw, for subscribers)
| Federal budget 2019: Liberals raise stock option taxes on high-paid executives: The federal government dusted off an old campaign promise Tuesday by pledging in the budget to increase taxation on the stock option gains of some of Canada’s most highly paid executives, a move seen as an attempt to siphon support from the New Democratic Party. “It’s a political move going into [this fall’s] election … they’re doing this to outfight the NDP,” said Toby Sanger, executive director of Canadians for Tax Fairness, a lobby group primarily funded by labour organizations. “They’re going after the 1 per cent” – the highest-income earners in the country. Story (Sean Silcoff, for subscribers)
| B.C.’s Carbon Engineering secures $68-million to commercialize C02-removal technology: A B.C. company that says it can help counter climate change by capturing carbon dioxide from the air has raised US$68-million to take its technology to market from a group of investors including three global resource giants and some of the world’s wealthiest individuals. Story (Sean Silcoff, for subscribers)
| Vanguard’s next big goal? Cutting the cost of advice: Vanguard Group Inc. last year introduced a breakthrough product that slashed the cost of a simple buy-and-hold balanced portfolio to a new low in Canada. Now, the exchange-traded fund giant is preparing for its next disruption: the cost of advice. Known as asset allocation exchange-traded funds, the Vanguard product provides investors with various mixes of stocks and bonds in a single fund that automatically rebalances with annual management fees of 0.22 per cent – a fraction of a typical mutual fund fee. Vanguard has recently added two more funds to its lineup to include an all-equity balanced ETF and an income product. Story (Clare O’Hara, for subscribers)
| Toronto Life owner St. Joseph Communications to buy Rogers magazines: Rogers Communications Inc. is exiting the magazine business after a months-long search for a buyer ended with a deal to sell Maclean’s and six other titles to Toronto Life owner St. Joseph Communications. Story (Christine Dobby, for subscribers)
| Caisse launches $250-million AI-focused fund: Caisse de dépôt et placement du Québec is earmarking $250-million for new investments in growing artificial-intelligence companies to help promote that emerging sector of Quebec tech. Story (David Milstead, for subscribers)
| Energy bull Eric Nuttal calling for share buybacks in the ailing energy sector: One of Bay Street’s biggest energy bulls is urging CEOs in the industry to plow money into major share buybacks as investors eschew the stocks. Story (Jeffrey Jones, for subscribers)
| Founder and chairman of Northland Power selling part of his stake in company: The chairman and founder of Northland Power is selling $750-million worth of his stake in the company through a secondary offering. James Temerty is selling 32,120,000 of his shares of the Toronto-based green-energy company he founded in 1987 for $23.35 a piece. Story (Alexandra Posadzki, for subscribers)
| Short seller’s attack on Manulife suffers after lawsuits against life insurers dismissed: A Saskatchewan court has dismissed lawsuits against several Canadian life insurers that claimed certain insurance products could be used as investment accounts that provided guaranteed returns to their policy-holders. Story (Clare O’Hara and Tim Kiladze, for subscribers)
| Understanding the Brookfield-Oaktree US$500-billion colossus: Brookfield Asset Management Inc. is spending nearly US$5-billion to buy 62 per cent of Oaktree Capital Group LLC. Don’t necessarily call it a “controlling” stake, however: With Brookfield taking just two of 10 Oaktree board seats, and the management of the Los Angeles-based distressed-debt investor remaining intact, the two money managers are describing the tie-up as more collaboration than takeover. It’s a US$500-billion pairing, they say, that gives their clients a wider spread of asset classes to choose from. The Globe and Mail’s David Milstead spoke to Brookfield chief executive Bruce Flatt and Howard Marks, the co-founder and co-chairman of Oaktree, to hear their takes on their new colossus. Q&A (David Milstead, for subscribers)
| Timbercreek launches second Irish property fund: Canadian real estate fund Timbercreek Investment Management Inc. is launching its second Irish property fund to take advantage of the Brexit chaos, which is driving companies out of the United Kingdom and into cities such as Dublin. Story (Andrew Willis, for subscribers)
| Ontario construction software firm Bridgit raises $6.2-million: The company now known as Bridgit Inc. began with what founders Mallorie Brodie and Lauren Lake call “crane hunting” – scouring London, Ont., for construction sites, looking for problems to solve. They found a few. And they’ve raised another $6.2-million to keep solving them. Story (Josh O’Kane)
| To prevent lost crypto assets, Canada should follow Japan’s approach: Millions of dollars of crypto funds lost. Thousands of traders with no idea where to turn. Disbelief across the sector. But this isn’t the story of Canadian exchange QuadrigaCX, whose chief executive died unexpectedly, reportedly taking to his grave the virtual keys to vaults holding cryptocurrencies worth $180-million. Rather, this is the remarkable story of two Japanese exchanges that lost a combined US$1-billion of cryptocurrencies belonging to their customers, and how Japan’s government interceded, making the country arguably the safest in the world for cryptocurrency investors today. Opinion (Nick Chong)
| Home buyers more focused on stress test than rates, brokers say: It happens every time, she says. The first thing Vancouver mortgage broker Patricia Collins gets asked when she sits down with clients is, “Can I pass the stress test?” “The first question used to be about rates,” but now, “the topic has been replaced by the scary stress test.” Story (Guy Dixon)
| Two new office towers that will reshape downtown Toronto and Vancouver: In Vancouver and Toronto, the centre is getting stronger. A pair of development companies are planning office towers that will reshape the downtowns of those two cities – and, with architecture by Bjarke Ingels Group, mixes up office space with infrastructure that runs the 21st-century city. Union Centre in Toronto, which is being revealed here for the first time, would be wedged into a tiny site next to Union Station. Yet it would be among the tallest and the biggest towers in the city: A planned 264 metres tall, almost as tall as as Scotia Plaza, and about 1.7 million square feet including office, data-centre space and an event venue. Opinion (Alex Bozikovic)
| MORE FINANCIAL SERVICES AND DEALS NEWS FROM FRIDAY
| Trump offers Federal Reserve job to campaign adviser Stephen Moore: U.S. President Donald Trump said Friday he has offered a position on the Federal Reserve’s Board of Governors to Stephen Moore, a conservative economic adviser who has become an outspoken critic of the Fed’s interest-rate policy. Story
| Image-sharing blogging website Pinterest files for IPO: Pinterest Inc, the owner of the image search website known for the food and fashion photos that its users post, filed for an initial public offering with U.S. regulators on Friday, looking to tap into a red-hot market for new stock offerings. Story
| Uber, Pinterest reportedly settle on NYSE for respective IPOs: Uber Technologies Inc and Pinterest, two of the highest profile internet companies planning to go public this year, have picked the New York Stock Exchange as the venue for their stock listings, according to sources familiar with the matter. Story
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Streetwise newsletter: Catch up on the best reads of the week
