Here are the top reads on deals and financial services over the last week. Have a great weekend!
Who picks the next Hydro One CEO, board or Ford? Everyone is waiting for the appointment of a new chief executive officer for Hydro One. Whoever steps into this meat grinder of a job will dictate the future of a company that keeps the lights on for 1.3 million Canadians, yet is stalled at the crossroads of politics and commerce. Column (Andrew Willis, for subscribers)
Supreme Court endorses legislation creating national securities regulator: The quest to create a national securities regulator goes back to 1935. Canada is the only G20 country that doesn’t have a national securities regulator. Story (Sean Fine, Tim Kiladze, Alexandra Posadzki)
CPPIB head raises red flags about low-quality bonds: Investors' desire for corporate debt – bonds companies issue to raise funds and that offer higher interest rates, or yield, than safer, government-issued securities – enables firms to determine for themselves whether the investors get paid first if it has to default, and to use a more liberal debt-to-earnings ratio to assess performance. “We’re very cautious on the loosening of credit,” says CPPIB chief executive Mark Machin, in describing the high demand for debt that has allowed this. Story (David Milstead, for subscribers)
OSC sets up task force for ‘burden reduction’ for businesses: The Ontario Securities Commission has set up an internal task force to examine its rules and regulations as well as ways to “lighten the load” for businesses. The OSC’s chair and chief executive officer, Maureen Jensen, announced on Thursday the launch of a “Burden Reduction Task Force” as part of a longstanding desire to examine the compliance burden on the firms the commission regulates. Story (Clare O’Hara and David Milstead, for subscribers)
BlackBerry in talks to buy cybersecurity company Cylance: report: BlackBerry Ltd is in talks to buy cybersecurity company Cylance Inc for as much as $1.5-billion, Business Insider reported on Friday, citing sources familiar with the matter. Story
Manulife, Sun Life face long slog to win over investors: After a decade spent enduring interest rates so low they were almost unimaginable, life insurers should finally be able to exhale. The global economy is on the upswing and rates are finally rising. Yet for all the recent momentum, something strange is happening: Canadian life-insurance stocks are not moving in lock step with interest rates. Story (Tim Kiladze, for subscribers)
Banks weigh legal action to block Statscan’s plan to obtain consumer records: Canada’s banks are considering legal action to prevent Statistics Canada from obtaining their clients’ banking records without consent as the federal agency faced criticism from several fronts Thursday during a special Senate hearing. Statscan’s chief statistician, Anil Arora, pledged during the meeting that the plan will not go ahead until the federal privacy commissioner completes an investigation. Story (Bill Curry)
Avison Young stamps new global footprint via GVA acquisition: Commercial realtor Avison Young will buy large U.K.-based rival GVA, in a deal that helps double the Canadian company’s size and give it a significant presence in one of the world’s top property markets. The acquisition will add 1,500 real estate professionals in 15 offices throughout Britain, Ireland and Poland, as well as affiliated offices in other parts of Europe and Asia. “We have gone global in one transaction," Avison’s chief executive Mark Rose said. Story (Rachelle Younglai, for subscribers)
London Metal Exchange applies for standing in Ontario: The London Metal Exchange, the world’s biggest and oldest market for industrial metals, is applying to Ontario’s regulator to be recognized as an exchange. In its application to the Ontario Securities Commission, the LME says it wishes to offer direct access to its trading facilities to participants in the province. Story (Alexandra Posadzki, for subscriber)
Bombardier sells $900-million in non-core assets, slashes 5,000 jobs: Bombardier Inc. is selling its Q400 turboprop business to west coast niche plane maker Viking Air and slashing 5,000 jobs as Canada’s biggest aerospace manufacturer unloads non-core assets and builds a future tied to luxury jets and trains. Montreal-based Bombardier announced the deal Thursday in tandem with third-quarter earnings, part of a series of measures that also includes the sale of its private aircraft flight training activities to CAE Inc. Story (Nicolas Van Praet, for subscribers)
Longview Aviation revenue set to take off with Bombardier Q400 turboprop acquisition: Victoria-based Longview Aviation Capital Corp. is set to become the continent’s largest commercial turboprop-aircraft manufacturer with the $300-million acquisition of Bombardier Inc.’s Q400 turboprop business and the storied de Havilland brand. While Bombardier is shedding employees and non-core assets, Longview Aviation, which owns Twin Otter maker Viking Air Ltd., will see annual revenue jump toward $1-billion from about $300-million as a result of the deal. Story (David Ebner, for subscribers)
Home Capital’s shares soar on news of $300-million share buyback: Shares of Home Capital Group Inc. jumped more than 20 per cent after the company announced it will repurchase up to $300-million worth of its common shares, a move designed to boost the company’s sagging stock price. Home Capital announced plans Wednesday to launch a $300-million substantial issuer bid, which will see the company repurchase $300-million worth of common shares at a fixed price. Story (Tim Kiladze, for subscribers)
Aircraft-leasing firm once again takes flight: Entrepreneurs Martin Goldfarb and Alon Ossip learned about aircraft leasing the hard way, by watching their first investment in the business lose more than half its value this spring. Story (Andrew Willis, for subscribers)
A quiet rule change will make it tougher for Canadians with a HELOC to get a second mortgage: Got a home-equity line of credit (HELOC)? Want to get a new mortgage? Lenders are about to make your life harder. Canada’s No. 1 player in HELOCs, Toronto-Dominion Bank, just changed a key policy on Tuesday. For people applying for a separate new mortgage and keeping their existing HELOC, TD is requiring that applicants prove they can afford a theoretical monthly payment based on the limit – not the outstanding balance – of that HELOC. TD joins a small number of other lenders, including Royal Bank of Canada, in applying this new policy. Story (Robert McLister)
Ottawa appoints board for Trans Mountain led by former BMO chief executive: The federal government has assembled a team of blue-chip business leaders to form Trans Mountain Corp.'s board of directors, a move the CEO says will help deal with criticism resulting from Ottawa’s takeover of the pipeline company and its expansion plans. Story (for subscribers)
Rogers magazine deal falls apart: A deal in the works for Rogers Communications Inc. to sell most of its magazines to the publisher of The Hockey News has fallen apart at the last minute. Story (Susan Krashinsky Robertson, for subscribers)
How Frank Stronach’s dream of building Florida’s finest private golf course turned into a nightmare: Frank Stronach’s potential multimillion-dollar losses on a luxury golf course in central Florida are expected to play a central role in a court case involving control of his family’s fortune. Story (Andrew Willis, for subscribers)
iA Financial keen on tapping Canada’s wealth segment while increasing its U.S. presence: IA Financial Group is on the hunt for acquisitions as it plots more growth in Canada’s wealth-management industry, while also pursuing targeted expansion in niche insurance markets in the United States. The Quebec City-based investment company, formerly known as Industrial Alliance, manages and administers approximately $173-billion in assets. Story (Clare O’Hara, for subscribers)
Thomson Reuters also on the acquisitions hunt: Thomson Reuters Corp. continues to boost revenue through organic growth and is looking at acquisitions after selling control of its financial and risk unit earlier this year. In the third quarter, the company’s total quarterly revenue from businesses it retained grew by 3 per cent from the same period a year ago, after stripping out currency fluctuations. Story (Tim Kiladze, for subscribers)
Finally, mortgage renewals have entered a new era: As Canadian mortgages come up for renewal, many households are starting to experience what TD Economics has dubbed a “completely new phenomenon” – higher interest rates. In a recent report, TD looked at the change to the conventional five-year mortgage rate over its term length. Essentially, this shows where rates for a popular product – the five-year, fixed-rate mortgage – stand upon renewal. For much of the past quarter-century, the change has been negative, meaning Canadians could expect lower rates come renewal time. Story (Matt Lundy)
Statistics Canada’s quest for your banking records isn’t a 'Big Brother’ move. They already know plenty about you: To hear Conservatives spin it, Statistics Canada’s plan to gather the banking and spending records of hundreds of thousands of Canadians is akin to “Big Brother on steroids” and an “Orwellian intrusion into the lives of Canadians.” The truth isn’t nearly as sinister. Opinion (Barrie McKenna)
Barrick shareholders approve Randgold acquisition: Barrick Gold Corp. is one step closer to closing its biggest acquisition in seven years with shareholders voting overwhelmingly in favour of its $6-billion (U.S.) takeover of Randgold Resources Ltd. On Monday, roughly 99 per cent of shareholders voted in favour of its zero-premium, all-stock purchase of Jersey-based Randgold, which operates in Africa. Story (Niall McGee, for subscribers)
Souring oil market poses challenge for Precision bid to acquire Trinidad Drilling: Precision Drilling Corp.’s plans to acquire Trinidad Drilling Ltd. in a friendly all-stock deal are being upended in a falling market that shows how, in times of strife, cash is king. In early October, Precision agreed to make a takeover offer, at the time worth $550-million, for Trinidad, a smaller oil and gas driller with international operations. Story (Jeffrey Jones, for subscribers)
Seven venture-capital firms receive total of $50-million from Ottawa: The federal government is giving $50-million in total to seven Canadian “alternative” venture-capital firms to back domestic technology startups, favouring established small-scale financiers and entrepreneurs with an investing track record over unproven investors. Recipients under Ottawa’s $400-million Venture Capital Catalyst Initiative (VCCI) program include the only VC firms based in Waterloo, Ont. (Garage Capital) and Halifax (Build Ventures); a successful Montreal startup factory called TandemLaunch that creates consumer electronics technology firms from scratch; Highline BETA, which helps companies including Royal Bank of Canada create and fund technology spinoffs from within their ranks; and AmorChem, a Montreal seed-stage biotechnology financier that’s expanding to Ontario. Story (Sean Silcoff, for subscribers)
Alithya Group scouting for acquisitions to expand company: A tech services consulting company that has roots in one of Canada’s most successful players in the field aims to expand quickly through acquisitions now that it’s gone public. Alithya Group Inc. shares surged by nearly a third on Friday, their first day of trade on the Toronto Stock Exchange and Nasdaq after completing a reverse takeover of Massachusetts-based Edgewater Technology Inc. The company also completed a $53-million private placement in a deal led by Desjardins Capital Markets. Story (Jeffrey Jones, for subscribers)
CIBC, BMO don’t expect to make credit reductions to energy sector: Two of Canada’s largest investment banks say they don’t expect to meaningfully cut credit to the energy sector despite the widening gap between Canadian and U.S. benchmark oil. The comments from BMO Nesbitt Burns Inc. and CIBC World Markets Inc. come as Canadian banks are undertaking their fall borrowing base redeterminations – a biannual process that occurs in fall and spring where banks review their loans to the energy sector. Story (Alexandra Posadzki, for subscribers)
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