Fortis Place in downtown St. John's, is seen on Tuesday, Feb. 9, 2016.Paul Daly/The Canadian Press
DEAL OF THE DAY
Fortis diversifies with $6.9-billion deal for U.S. transmission company ITC
St. John's-based Fortis Inc. spooked skittish investors on Tuesday with a premium-priced, $6.9-billion (U.S.) deal for Michigan-based transmission company ITC Holdings Corp., which will greatly expand its exposure to the American electricity business.
Fortis – considered a safe dividend stock for risk-averse investors – will pay the equivalent of $44.90 for each ITC share, in the form of $22.57 in cash and 0.752 Fortis shares, a premium of 14 per cent to ITC's closing stock price on Monday. The Newfoundland company's shares fell sharply after the early morning announcement, losing more than 12 per cent of its value before recovering somewhat in later trading. Story
Fortis bets on infrastructure's allure with latest electricity deal
Fortis Inc. wants another investor to take a bite out of its latest acquisition – and finding someone with an appetite shouldn't be too hard.
The St. John's-based utility company's $6.9-billion (U.S.) deal for U.S. power transmission business ITC Holdings Corp. has only just been announced and already the buyer is hoping to sell a chunk of the business.
Partnering is not an unusual approach on a deal like this – many major infrastructure bids are made through consortiums – but it is uncommon to see a deal come to market before all the participants are lined up. Fortis wants to find a buyer for between 15 and 20 per cent of ITC as part of the plan to help finance the deal.
"We believe there are significant pools of capital that would express very serious interests in investments such as this," Karl Smith, chief financial officer at Fortis, said on a call with analysts on Tuesday. "We feel that there's tremendous demand for high-quality assets of this nature, particularly from infrastructure funds." Story
MERGERS AND ACQUISITIONS
Porter Airlines searches for buyer, sources say
Toronto's Porter Aviation Holdings Inc. has been quietly searching for a buyer, throwing the future of its business model as a classy, convenient rival to bigger Canadian airlines into question.
The search process is ongoing, according to people familiar with the plans, and there is no guarantee it will result in a transaction, but the company's financial backers have been actively looking for an exit strategy through a sale.
Better known as Porter Airlines, the company, founded in 2006 by Robert Deluce, flies out of Toronto's Billy Bishop Island Airport. When it launched, its goal was to take on Air Canada and WestJet Airlines Ltd. by offering "premium economy" service, with perks such as free wine on board and WiFi in its terminal lounge, as well as providing the convenience of flying from downtown. Story
INVESTMENT BANKING
More workers leave Canaccord
Canaccord Genuity Group Inc. has parted ways with three senior staffers, including a high-ranking investment banker.
Jens Mayer, Andrew Jappy and Peter Virvilis – all long-serving Canaccord employees – are the latest to leave the firm, sources said.
Canaccord acquired Genuity Capital Markets in 2010 but over time a reverse takeover of sorts has taken place whereby Genuity staffers have taken on increasingly senior roles and many Canaccord employees have left.
Mr. Mayer was global co-head of investment banking and had been with Canaccord for 16 years.
Mr. Jappy had been responsible for information technology. He joined Canaccord in the mid-1990s.
Mr. Virvilis was head of operations and a 29-year veteran. He oversaw the independent brokerage's back office operations. Story
INSIGHT
The case for speaking up on Bay Street
At a breakfast panel five years ago inside Torys LLP's Toronto head office, Ontario Justice H.J. Wilton-Siegel really stepped in it. As a guest at his former law firm, the judge unexpectedly stole the show by speaking up from the audience about Frank Stronach's prodigious payout from Magna International.
Justice Wilton-Siegel, you see, was the guy who approved the plan of arrangement that handed King Stronach $863-million in exchange for voting control of his auto parts giant. Even though the massive cheque had been in the news for months, Bay Street still had a lot of unspoken feelings about it – and, apparently, so did he. Piping up from the crowd, the judge argued that Magna's board "did rather spectacularly vacate the field" by putting the payment to a shareholder vote, effectively punting its responsibility to review the payday.
All these years later, those words might not carry as much shock value. Time has a way of dulling sharp edges. But this was the judge who presided over the case. And his comment came at a time when few people dared say anything negative about the cheque. Even the Ontario Securities Commission, which formally reviewed the file, had largely stayed mum.
Until recently, Canada had a reliable cast of shooters who would happily speak their minds. Think pension plan titan Claude Lamoureux or investing legend Stephen Jarislowsky or former Toronto-Dominion Bank chief Ed Clark. Over the past decade, most of their ilk have retired or taken a step back, leaving a vacuum in their wake. The next generation of bigwigs, it seems, is much more meek. Story
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Niall McGee