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Promising Canadian IPO cancelled amid Brexit turmoil

The market turmoil that erupted in the aftermath of the Brexit vote has claimed a prominent Canadian casualty: MCAP Corp.'s initial public offering.

The mortgage lender filed for a $275-million IPO in May, and institutional and retail orders soon started flowing, according to people familiar with the offering. A few days before Britain's referendum, things came to a halt. On Wednesday, the deal was pulled altogether.

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"MCAP Corporation announced today, due to current adverse market conditions, it will not be proceeding with its initial public offering of common shares at this time," the company, a mortgage lender, announced in a statement.

It is a frustrating decision for everyone involved. Because the housing market has been so hot, and because there are comparable publicly traded companies already in the market, such as First National Financial Corp., MCAP was widely viewed as one of the surer bets for a successful IPO.

In the end, prospective investors balked, according to people close to the situation, even though equity markets are now rebounding. Despite the early orders, institutional investors got picky as markets turned volatile. In the past few days some buyers suggested they would support the deal but only at a price below the $18 to $21 marketing range. By Wednesday, the order book still wasn't full. FULL STORY

Hershey says board unanimously rejects Mondelez takeover bid

Hershey Co. says its board has unanimously rejected a takeover offer from Oreo maker Mondelez International Inc. and that the offer provided "no basis for further discussion." The chocolate maker confirmed that it received the preliminary offer from Mondelez International to be taken over for a mix of cash and stock totalling $107 (U.S.) for each share of Hershey common stock.

That would value the deal at roughly $22.3-billion, according to FactSet. FULL STORY

Lions Gate to buy Starz for $4.4-billion

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Lions Gate Entertainment Corp, the film studio behind the Hunger Games movies, said Thursday it would buy premium television network Starz for $4.4-billion in cash and stock, in a deal that would unite two media companies with ties to cable mogul John Malone.

Both companies held on and off talks for some time. The long-anticipated deal will help diversify Lionsgate's business and make its financials less dependent on whether it can deliver a hit movie, according to Jefferies analyst John Janedis.

Lionsgate Chief Executive Jon Feltheimer said on a conference call that the deal creates a "global content powerhouse that invests nearly $2-billion a year in new content."

Starz, which competes with HBO and Showtime, also develops original programing such as the fantasy series "Outlander." FULL STORY

DAILY DEALS

Engineering firm WSP Global Inc. has decided not to pursue its proposed takeover of British construction advisory business Sweett Group PLC. Montreal-based WSP said on Thursday it has "terminated efforts to acquire Sweet" and will not sweeten its offer price of 35 pence (52 cents) per Sweett share. FULL STORY

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Superior Plus says it's no longer planning to buy Canexus Corp. through a friendly takeover that would have combined two of Canada's largest industrial chemical companies. Toronto-based Superior Plus made the announcement Thursday morning, three days after a U.S. agency said it would seek to block the transaction because of its impact on competition in the sodium chlorate market. FULL STORY

Laurentian Bank of Canada has reached an agreement with New York-based CIT Group Inc. to acquire its Canadian equipment financing and corporate financing activities. The Montreal-based bank didn't announce the full purchase price but did say it would pay for part of the acquisition through a $135-million financing, announced separately. The purchase is scheduled to close in the final quarter of 2016, subject to customary closing conditions. PRESS RELEASE

Canadian private equity fund manager TorQuest Partners has raised $925-million for its fourth fund, beating its initial $750-million target. The fund will focus on middle-market companies. PRESS RELEASE

HAPPY CANADA DAY!

The Streetwise newsletter will return Tuesday July 5

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