DEAL OF THE DAY:
Dundee plans management buyout
Dundee Corp. has been getting creative in its quest for cash as it grapples with the commodity rout.
That continued Tuesday with a plan reported by The Globe and Mail's Tim Kiladze, Niall McGee and Jeffrey Jones: Employees of the capital markets division are quietly moving to take the dealer private through a partnership model that has largely fallen out of vogue.
While the proposed management buyout of Dundee Capital Markets Inc. has been in the works for a while and may not be completed for months, the goal is to give top partners stakes in the investment bank, with Dundee Corp. retaining some ownership.
It's a rough time for the industry. Numerous boutique dealers have recently shut down and bigger independents are slashing staff and costs. GMP Capital Inc., one of the largest independents, cut nearly a quarter of its work force earlier this month.
Dundee Corp.'s struggles have been well documented. Three quarters into fiscal 2015, the company had lost $513-million, largely owing to writedowns and impairments.
The management buyout is not the first move amid the company's efforts to shore up its cash reserves. In December, Dundee launched a share exchange program. It was not particularly well-received.
MERGERS AND ACQUISITIONS
Another creative move
Two Canadian pension plans are teaming up to buy about $530-million of annuities, in a deal to transfer investment, longevity and inflation risk to an insurance company.
The two defined-benefit pension plans, owned by companies that did not want to be named, have struck the joint annuity agreement with Sun Life Financial Inc. despite having no other relation to each other. Banding together and doing the transaction at the same time brought more than $20-million in savings combined as Sun Life balanced the inflation exposure of the two plans.
Sun Life began working with both companies separately in early 2015, and the insurer noticed that they had different inflation formulas. "One plan sponsor promised to increase benefits when inflation was low. The other promised to increase benefits when inflation was high," said Brent Simmons, senior managing director for defined benefits at Sun Life. Story
Trican to sell U.S. assets
Trican Well Service Ltd. said it has reached a deal to sell its U.S. pressure-pumping business to Texas-based Keane Group for $285-million, driving the shares up more than 80 per cent.
Calgary-based Trican said it will use proceeds from the transaction to pay down its total debt load to roughly $235-million. It also announced a deal Tuesday with lenders that removes some financial obligations associated with its debt until the third quarter of 2016. Story
AIG's sweeping overhaul
American International Group Inc. said it will spin off its mortgage insurance unit and sell its broker-dealer network as part of the sweeping changes it has been promising shareholders as it fends off activist investor Carl Icahn.
The biggest U.S. commercial insurer by premiums also said on Tuesday it would cut $1.6-billion (U.S.) of costs and return at least $25-billion to shareholders over the next two years.
AIG's cost structure has been a cause of concern for investors as rock-bottom commercial property and casualty insurance rates across the industry have battered underwriting. Story
Tervita considers asset sales
Tervita Corp. is considering options including asset sales and debt restructuring as it struggles with high debt amid a crude market slump.
The Calgary-based oil field services company is working with advisers on the process, Cam Hantiuk, a company spokesman, said in an e-mail on Tuesday. Story
INITIAL PUBLIC OFFERINGS
Bain's Blue Coat targets IPO
Blue Coat Systems Inc., the Internet security software company backed by Bain Capital, will seek to raise as much as $500-million (U.S.) in an initial public offering this year, people with knowledge of the matter said. Story
ON THE MOVE
Maureen Jensen nominated to lead OSC
The Ontario government has reached inward for the next leader of the Ontario Securities Commission, nominating the agency's executive director, Maureen Jensen, to replace departed chair Howard Wetston.
Ms. Jensen, a veteran of capital markets regulation in Canada, is the first woman to be nominated as chair and chief executive officer of the OSC. Securities experts say they are unaware of any OSC chair who was appointed from within the agency's ranks, with prior chairs coming from the legal, financial or regulatory communities. Story
IN CASE YOU MISSED IT
Moody's downgrades Scotiabank
Moody's Investors Service downgraded the long-term debt of Bank of Nova Scotia on Monday evening by one notch, but it wasn't out of concern about the bank's exposure to low oil prices and the weak Canadian economy.
Instead, the downgrade was related to the bank's expansion into the credit card and auto loan business. Story
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